20210930 Thailand Market Strategy - Tri-transition ...

Songklod Wongchai Suwat Sinsadok [email protected] [email protected]

+66 2611 3553 +66 2611 3558

PREPARED BY FSS INTERNATIONAL INVESTMENT ADVISORY SECURITIES CO LTD (FSSIA). ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES CAN BE FOUND AT THE END OF THIS REPORT

EQUITIES RESEARCH

30 SEPTEMBER 2021

Thailand Market Strategy

4Q21 investment strategy underscored by three ‘transition’ themes We believe that post-Covid investment strategy in 4Q21-2022 onward will be underlined by three key economic transitions, both globally and domestically. We see the three transitions as shifts toward growth, green energy, and normalcy, which should be supported by an economic recovery and progressions toward the digitalisation of platforms and ecosystems. These shifts will be game changers, in our view, that will necessitate all parties involved to not only adopt but also adapt themselves ahead of, or at least in tandem with, the fast pace of changes in technology, consumer behaviours, and supply chain management.

Economic rebound is now on track, led by higher CEI and LEI Looking into 4Q21-2022, we expect Thailand’s GDP to rebound meaningfully, driven by both internal factors (private consumption, investment and public consumption) and net exports. We expect industrial sectors to lead the net export growth, followed by the agricultural and service sectors, given the gradual recovery of tourism and internal flights. Based on the Bank of Thailand (BoT)’s two leading indicators, the Coincident Economic Index (CEI) and Leading Economic Index (LEI), we expect Thailand’s GDP to recover in 4Q21-2022 to close to the pre-Covid level of 3-4% p.a. The key drivers should come from a higher import volume of capital goods, a higher Manufacturing Production Index, more gross value-added tax collected, higher domestic automobile sales, and an improving LEI in 1H21, led by higher export sales and a rising SET index. Hence, we think Thailand’s economic activities should rebound in 4Q21 into 2022, led by a higher CEI and LEI.

Adaptability and readiness are key We identify the ‘transition’ investment theme as revolving around three major shifts: 1) transition to growth via JVs to create the right synergy (SCB, JMT, and NCAP); 2) transition to normalcy to capture post-Covid era growth (CPALL, HMPRO, AOT, BA, and DMT); and 3) transition to green energy during the fossil-to-renewable period (PTTEP, TOP, BANPU, IVL, EA, and NEX), all being sound investment strategies during the transition from the pandemic to post-pandemic period, in our view.

Reaffirming 1,700 as our SET Index target by the end of this year We retain our Overweight recommendation on the Thai equity market with our SET Index target of 1,700 by end-2021, driven by 1) improving corporate profit growth, led by the energy, petrochemical and utilities sectors; and 2) a Thai economic recovery on higher exports and domestic consumption post lockdown easing. For Oct-21, we expect the SET Index to remain rangebound between 1,600-1,670 with the transition investment theme. Our top picks are BANPU, EA, JMT, NCAP, CPALL, HMPRO, BA, AOT, SCB and DMT.

Tri-transition underscores investment strategy in 4Q21

Thailand Market Strategy Songklod Wongchai

2 FINANSIA 30 SEPTEMBER 2021

Tri-transition investment strategy for the post-Covid era

We believe that post-Covid investment strategy in 4Q21-2022 onward will be underlined by three key economic transitions, both globally and domestically. We see the three transitions as shifts toward growth, green, and normalcy, which should be supported by an economic recovery and progressions toward the digitalisation of platforms and ecosystems. These shifts will be game changers, in our view, that will necessitate all parties involved to not only adopt but also adapt themselves ahead of, or at least in tandem with, the fast pace of changes in technology, consumer behaviours, and supply chain management.

Exhibit 1: Our top picks for Oct 2021 with tactical views Company BBG Rationale on resilience in business model and strong fundamentals

Banpu BANPU TB BANPU is a winner of the current coal price and gas price uptrend given its 0.8bscfd of gas production capacity in the US. Additionally, the higher Henry Hub gas price should directly benefit BANPU’s shale gas unit.

Energy Absolute EA TB EA is a defensive play amid the Thai renewables sector for its strong net profit outlook from new S-curve growth projects which have started to materialise in 3Q21. We expect EA’s share price to rerate ahead of the first net profit booking from its EV and battery ventures in 3Q21 and 4Q21.

CP All CPALL TB CPALL is a catch-up play in the commerce sector. The company is a key beneficiary of both domestic and international tourism recoveries. We think that long-term synergy creation between MAKRO and Lotus could indirectly pass through to CPALL. Its valuation could drop to 25x from its 5-year average currently, based on its potential earnings recovery to the pre-Covid level in 2022.

Home Product Center HMPRO TB We project HMPRO’s earnings to exceed their pre-Covid level at THB6.7b in 2022. An earnings recovery should be visible from 4Q21 toward the end of 2022. Its current valuation is attractive, trading at c25% below its pre-Covid peak of THB18.6 and at 28x 2022E P/E, which is equivalent to -1.0SD of its 5-year mean of 33x.

Don Muang Tollway DMT TB DMT should be a key beneficiary of the lockdown easing since Sep-21 as 1) the resumption of out-of-home (OOH) activities typically increases the demand for expressway usage; and 2) the resumption of domestic air travel should increase ridership.

Airports of Thailand AOT TB AOT should be the first tourism stock whose earnings exceed the pre-Covid level, in our view, led by higher revenue from new concession contracts with King Power. As the minimum guarantee waiving will end in March 2022, concession revenue could accelerate from 2HFY22 onward, potentially jumping from THB17.5b in FY19 to THB27.0b in FY23, and supporting its post-Covid earnings turnaround.

Siam Commercial Bank SCB TB We think SCB has the best position in the banking sector to benefit from the region’s digital age with its integrated digital platform, and the proactive long-term debt restructuring program offered to its clients could solve the prolonged asset quality problem. We believe SCB should deliver solid performance in the next two years. We also expect its dividend payout ratio to increase. Thus, shareholders would benefit from the expected ROE uplift.

JMT Network Services JMT TB We believe JMT can deliver outstanding net profits vs its peers, both in the long and short term, especially in 4Q21. We view JMT as a stock to hedge against the economic downturn, supported by its unsecured portfolio. It should also grow with the economic recovery via its secured portfolio.

Next Capital NCAP TB We expect NCAP to deliver outstanding net profit growth at a 38% three-year CAGR from 2020-23. With the support of its major shareholders and its new highly experienced management, NCAP should be able to successfully transform itself from a motorcycle hire purchase lender to a fully-equipped tech lender.

Bangkok Airways BA TB We like BA for its favourable risk/reward ratio, trading at 15-17x 2023E P/E, compared with other tourism stocks (hotel operators and AOT) at 25-35x. BA’s multiple could rerate to 20-30x as it transforms from an airline to an airport operator. We estimate that after BA terminates the lease contract for Samui Airport with Samui Airport Property Fund, its airport-related EBIT contribution should jump to 48% in 2023, while its airline business EBIT should contribute only 12%.

Source: FSSIA estimates

For Thailand, an increasing number of companies have begun to adapt themselves to the changing economic and industry environment. As society adjusts to life with Covid-19, we can see three transitions currently ongoing to transform the traditional brick-and-mortar business model into online, technology platform, and ecosystem-based ventures.

A higher number of strategic partnerships have been formed to integrate businesses, build more competitive business structures, and create more adaptive and nimble business platforms. Companies like JMART and BTS have formed strategic partnerships and cross-holding structures to create new business JVs that will deploy each other’s strengths to drive business growth. GULF acquired stakes in INTUCH to allow GULF to access ADVANC’s big data and 5G technology platform. The acquisition has already yielded its first fruit in the form of ‘AISCB’, a JV between AIS (ADVANC) and SCB to operate a new nano-finance company, leveraging ADVANC’s 43m customer base and SCB’s 12m client base.



Exhibit 2: Annual GDP growth – contribution by expenditure and composition during 2015-19 before emergence of Covid-19

Sources: Office of National Economic and Social Development Council (NESDC); FSSIA's compilation

Return of private consumption and investment to drive GDP growth in 4Q21-2022. During the pre-Covid period in 2015-19, Thailand’s GDP had been mostly driven by domestic factors, including private and public consumption and private investment. However, since 1Q20 when the Covid-19 pandemic hit the country, all GDP growth engines have slowed down or even sharply declined, particularly for the private segment which is tightly linked to tourism and consumer consumption.

In 1H21, we started to see signs of recovery in private consumption and investment, as well as strong public investment, which boosted Thailand’s GDP growth to 2.6% y-y in 1Q21 and 7.5% y-y in 2Q21. The solid private consumption was supported by the government’s multiple subsidies and promotional schemes, such as ‘Tiew Duay Gun’ (‘travel together’ – subsidy for hotel room rates and shopping), ‘We Win’ (weekly subsidies of THB1,000 for two weeks), and ‘Ying Chai Ying Dai’ (e-vouchers as cashback for shopping for local food and necessities).

Exhibit 3: Quarterly GDP growth – contribution by expenditure and composition in 1H21

Sources: Office of National Economic and Social Development Council (NESDC); FSSIA's compilation

7.5

0.8

7.2

2.7

1.0

3.1 3.4 4.2 4.2

2.3

(6.1)

2.0

(8)

(6)

(4)

(2)

0

2

4

6

8

10

(15)

(10)

(5)

0

5

10

15

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 1H21

(y-y %)(%) Private consumption Public consumption Private investmentPublic investment Net exports Change in inventoriesGDP growth (RHS)

52.3

15.4

18.3

6.3

8.0

(0.3)

(10) 10 30 50

Privateconsumption

Publicconsumption

Privateinvestment

Publicinvestment

Net exports

Change ininventories

(%)

Average 5 years (2015-19)

5.1 4.6 3.2 3.8

2.8 2.4 2.7 1.3

(2.1)

(12.1)

(6.4)

(4.2)(2.6)

7.5

(15)

(10)

(5)

0

5

10

(50)

(40)

(30)

(20)

(10)

0

10

20

30

40

50

1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21

(y-y %)(%) Private consumption Public consumption Private investmentPublic investment Net exports Change in inventoriesGDP growth (RHS)

53.7

14.9

17.7

7.1

2.7

0 20 40 60

Privateconsumption

Publicconsumption

Privateinvestment

Publicinvestment

Net exports

Change ininventories

(%)

1H21



Looking into 4Q21-2022, we expect Thailand’s GDP to rebound meaningfully, driven by both internal factors (private consumption, investment and public consumption) and net exports. We expect industrial sectors to lead the net export growth, followed by the agricultural and service sectors, given the gradual recovery of tourism and internal flights.

Exhibit 4: GDP by industry, average 2015-19 Exhibit 5: GDP by sector, average 2015-19

Sources: NESDC; FSSIA's compilation


Services 61.2%

Industrial32.6%

Agriculture6.2%

Agriculture6.3%

Manufacturing27.3%

Wholesale /retail trade

14.8%

Financials7.1%

Transport6.6%

Accomm/ food service5.8%

ICT5.1%

Real estate3.8%

Construction2.8%Mining

2.3%Health/social work

2.2%

Public admin /defense

5.0%Education

3.2%

Electricity2.9%

Others4.8%



Two leading indicators show signs of economic recovery in 4Q21-2022

Based on the BoT’s two leading indicators, the CEI and LEI, we expect Thailand’s GDP to recover in 4Q21-2022 to close to the pre-Covid level of 3-4% p.a. The key drivers should come from a higher import volume of capital goods, a higher Manufacturing Production Index, more gross value-added tax collected, and higher domestic automobile sales. Similarly, the LEI improved in 1H21 but at a smaller degree than the CEI, led by higher export sales and the rising SET Index. Hence, we think Thailand’s economic activities should rebound in 4Q21 into 2022, led by a higher CEI and LEI.

Exhibit 6: Coincident Economic Index and components (seasonally adjusted)

Source: Bank of Thailand

(15)

(10)

(5)

0

5

10

15

(15)

(10)

(5)

0

5

10

15

1994

1994

1995

1996

1996

1997

1998

1998

1999

2000

2000

2001

2002

2002

2003

2004

2004

2005

2006

2006

2007

2008

2008

2009

2010

2010

2011

2012

2012

2013

2014

2014

2015

2016

2016

2017

2018

2018

2019

2020

2020

2021

(y-y %)(y-y %)Coincident Economic Index (CEI) Real GDP growth (RHS)

(15)

(10)

(5)

0

5

10

15

(60)

(40)

(20)

0

20

40

60

80

1994

1995

1997

1998

2000

2001

2003

2004

2006

2007

2009

2010

2012

2013

2015

2016

2018

2019

2021

(y-y %)(y-y %) Import volume index (excl. Gold)

Real GDP growth (RHS)

(15)

(10)

(5)

0

5

10

15

(40)

(30)

(20)

(10)

0

10

20

30

40

50

60

1994

1995

1997

1998

2000

2001

2003

2004

2006

2007

2009

2010

2012

2013

2015

2016

2018

2019

2021

(y-y %)(y-y %) Manufacturing Production Index


(15)

(10)

(5)

0

5

10

15

(40)

(20)

0

20

40

60

80

1994

1995

1997

1998

2000

2001

2003

2004

2006

2007

2009

2010

2012

2013

2015

2016

2018

2019

2021

(y-y %)(y-y %) Gross Value Added Tax at 2000 prices


(15)

(10)

(5)

0

5

10

15

(130)

(80)

(30)

20

70

120

199

41

995

199

71

998

200

02

001

200

32

004

200

62

007

200

92

010

201

22

013

201

52

016

201

82

019

202

1

(y-y %)(y-y %) Domestic automobiles sales (unit)


Scale adjusted for 2012 's abnormal growth near 500% from first car scheme



Exhibit 7: Leading Economic Index and components (seasonally adjusted)

Source: -Bank of Thailand

(15)

(10)

(5)

0

5

10

15

(10)

(5)

0

5

10

1519

94

1994

1995

1996

1996

1997

1998

1998

1999

2000

2000

2001

2002

2002

2003

2004

2004

2005

2006

2006

2007

2008

2008

2009

2010

2010

2011

2012

2012

2013

2014

2014

2015

2016

2016

2017

2018

2018

2019

2020

2020

2021

(y-y %)(y-y %)Leading Economic Index (LEI) Real GDP growth (RHS)

(15)

(10)

(5)

0

5

10

15

(200)

(100)

0

100

200

300

400

500

600

1994

1995

1997

1998

2000

2001

2003

2004

2006

2007

2009

2010

2012

2013

2015

2016

2018

2019

2021

(y-y %)(y-y %) Authorized capital of newly registeredcompaniesReal GDP growth (RHS)

(15)

(10)

(5)

0

5

10

15

(100)

(50)

0

50

100

150

199

41

995

199

71

998

200

02

001

200

32

004

200

62

007

200

92

010

201

22

013

201

52

016

201

82

019

202

1

(y-y %)(y-y %) Construction areas permitted (1000 sqm)


(15)

(10)

(5)

0

5

10

15

(40)

(30)

(20)

(10)

0

10

20

30

40

50

60

1994

1995

1997

1998

2000

2001

2003

2004

2006

2007

2009

2010

2012

2013

2015

2016

2018

2019

2021

(y-y %)(y-y %) Export volume index (excl. gold)


(15)

(10)

(5)

0

5

10

15

(80)

(60)

(40)

(20)

0

20

40

60

80

100

120

140

199

41

995

199

71

998

200

02

001

200

32

004

200

62

007

200

92

010

201

22

013

201

52

016

201

82

019

202

1

(y-y %)(y-y %) SET index


(15)

(10)

(5)

0

5

10

15

(10)

(5)

0

5

10

15

20

25

1994

1995

1997

1998

2000

2001

2003

2004

2006

2007

2009

2010

2012

2013

2015

2016

2018

2019

2021

(y-y %)(y-y %) Broad money at 2000 prices


(15)

(10)

(5)

0

5

10

15

0

1

2

3

4

5

6

1994

1995

1996

1998

1999

2001

2002

2003

2005

2006

2008

2009

2011

2012

2013

2015

2016

2018

2019

2020

(y-y %)(y-y %) Oil price inverse index (Dubai)




Key transitional catalysts to drive the SET Index higher

During this period of transitions, we have identified the key catalysts that we think will accommodate the transitional growth phase for Thai corporates in 4Q21. We believe that investment strategy should shift toward industries and companies that are well positioned to grow their earnings in faster and more efficient ways than competitors via JVs and partnerships to gain market share and exploit new demand opportunities using their unique integrated business models.

Thai economy likely to bottom out in 3Q21, according to BNP Paribas’ forecasts, which project that Thailand’s GDP should shrink by 2.0% y-y in 3Q21 and then rebound to grow by 1.3% y-y in 4Q21. Thailand has the slowest GDP growth outlook among all major emerging countries covered by BNP Paribas. For 2022, BNP Paribas forecasts Thailand’s GDP growth at 3.4% y-y, up from 0.9% y-y in 2021.

Exhibit 8: BNP Paribas’ GDP forecasts Exhibit 9: GDP forecasts – Thailand slowest to recover

Source: BNP Paribas - Global Outlook Q42021, published 7 Sep 2021

Source: BNP Paribas - Global Outlook Q42021, published 7 Sep 2021

Meanwhile, we think Thailand’s 2H21 GDP growth will surpass market expectations due to the low base effect, a domestic activity boost, and improvements in the vaccination rate. We expect private consumption and investment and public investment to remain strong in 2H21-2022. Net exports and public investment should rise markedly, based on the stronger export outlook on the global economic reopening and a higher government debt ceiling to accommodate larger public investments in the new fiscal budget year (4Q21-3Q22).

Exhibit 10: Annual GDP and real growth rate Exhibit 11: GDP by expenditure, average 2015-19

Sources: NESDC; BNP Paribas estimates as of 7 Sep 2021; FSSIA's compilation


(10)

(8)

(6)

(4)

(2)

0

2

4

6

8

10

0

2,500

5,000

7,500

10,000

12,500

15,000

17,500

20,000

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

1H21

2022

E

(y-y %)(THB b) Annual nominal GDPReal GDP growth (RHS)BNP Paribas estimates (RHS)

Private consumption

52.3%

Public consumption

15.4%

Private investment

18.3%

Public investment

6.3%Net exports

8.0%

Change in inventories

-0.3%



Loan growth outlook is set to outpace GDP in 2022. Despite the sluggish GDP growth during the pandemic period, Thailand’s loan growth has mostly outpaced the country’s GDP growth, while the banking industry’s non-performing loan (NPL) to total loan ratio has remained low at around 3.0-3.1%, reflecting high quality loan growth, while risk management remains under financial institutions’ control, in our view.

However, the bank loan volume expansion has mainly come from the working capital and term loans of the corporate segment to improve their financial liquidity, due to the impact of the partial lockdown. The overall loan portfolio in Jul-21 for Thai banks under our coverage rose 0.51% m-m, with KBANK seeing the largest increase at 2.16% due to an increase in all segments, both from new demand and the financial aid programs. TISCO still posted the steepest drop, at 2.44%, due to a decline in all segments, especially corporates from a big client’s loan repayment, with the retail segment continuing to decline thanks to its conservative lending policy.

Exhibit 12: Loan growth vs GDP growth Exhibit 13: NPLs to loans



Monetary policy should remain accommodative in 4Q21-2022. We expect that the BoT will maintain its low policy interest rate at 0.5% in 4Q21, likely until at least mid-2022, based on 1) the low inflation rate below 1% despite the higher oil price; 2) the central bank’s target to improve economic liquidity via higher loan growth; and 3) the measures to manage NPLs for the small and medium enterprises (SMEs) that have been hard hit by the Covid-19 pandemic.

Exhibit 14: Thai policy rate vs US Fed Fund rate Exhibit 15: Thailand inflation

Source: Bloomberg

Sources: The University of The Thai Chamber of Commerce; Bloomberg

(15)

(10)

(5)

0

5

10

15

20

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

(y-y %)Loan growth Real GDP growth

545.5

15.69

3.09

0

2

4

6

8

10

12

14

16

18

0

500

1,000

1,500

2,000

2,500

3,000

1Q

99

1Q

00

1Q

01

1Q

02

1Q

03

1Q

04

1Q

05

1Q

06

1Q

07

1Q

08

1Q

09

1Q

10

1Q

11

1Q

12

1Q

13

1Q

14

1Q

15

1Q

16

1Q

17

1Q

18

1Q

19

1Q

20

1Q

21

(%)(THB m)NPL NPL % of total loans (RHS)

0

1

2

3

4

5

6

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

(%) Thailand policy rate (current 0.50%)

Fed Fund Rate (current 0.09%)

(4)

(3)

(2)

(1)

0

1

2

3

4

5

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

202

0

202

1

(y-y%) Thailand core CPI y-y%

Thailand CPI y-y%

BoT target inflation for 2021, 1-3%



High household debt remains manageable. Although Thailand’s household debt and household debt to GDP ratio hit an 18-year high at THB14.13t and 90.5%, respectively, in 1Q21, according to the BoT, we believe that household debt will decline after Thailand’s GDP rebounds in 2022 onward.

Exhibit 16: Household debt as % of GDP Exhibit 17: Household loans to GDP vs GDP growth



The risk to fiscal instability is low, in our view, as the new public debt ceiling remains manageable and most of the public debt is from domestic funding with local currency borrowing costs. The Thai government has increased the debt ceiling to 70% of GDP in Sep-21, up from the 60% threshold under fiscal law, to accommodate the government’s existing plan to borrow THB500b to boost the economic recovery.

The public debt to GDP ratio should be higher than 60% in 2022 vs 55.6% in Jul-21, in our view. We believe the higher public debt ceiling should be perceived as an accommodative measure for the economic recovery rather than as a detrimental move that could put the country’s credit rating at risk of a downgrade.

Exhibit 18: Public debt to GDP Exhibit 19: International reserves to GDP

Source: Public Debt Management Office (PDMO)


14.1

90.5

30

40

50

60

70

80

90

100

0

2

4

6

8

10

12

14

16

1Q03

1Q04

1Q05

1Q06

1Q07

1Q08

1Q09

1Q10

1Q11

1Q12

1Q13

1Q14

1Q15

1Q16

1Q17

1Q18

1Q19

1Q20

1Q21

(%)(THB t) Household loans % of GDP (RHS)

7.5

4.6 0

5

10

15

20

25

30

(15)

(10)

(5)

0

5

10

15

20

1Q03

1Q04

1Q05

1Q06

1Q07

1Q08

1Q09

1Q10

1Q11

1Q12

1Q13

1Q14

1Q15

1Q16

1Q17

1Q18

1Q19

1Q20

1Q21

(%)(%) GDP growth HH loan growth (RHS)

4,002 6,902 7,019 8,909

42.4 41.2 41.7

55.6

59.0

30

35

40

45

50

55

60

65

70

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Sep

-05

Sep

-07

Sep

-09

Sep

-11

Sep

-13

Sep

-15

Sep

-17

Sep

-19

Nov

-19

Jan-

20M

ar-2

0M

ay-2

0Ju

l-20

Sep

-20

Nov

-20

Jan-

21M

ar-2

1M

ay-2

1Ju

l-21

Sep

-21

(%)(THB b) Public debt % of GDP (RHS)Estimated

Ceiling raised to 70%, from 60% of GDP on 20 Sep 21, to faciliitate economy rebuild

252.0

17.9

48.0 51.0

0

10

20

30

40

50

60

0

50

100

150

200

250

300

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

1Q21

Au

g-21

(%)(USD b) International reservesReserves to GDP (RHS)



Consumer and Private Consumption indices vs retail sales. While both the Consumer Confidence Index (CCI) and Private Consumption Index (PCI) have been declining since the start of the Covid-19 pandemic in 1Q20, we think the recent recovery in the retail sales growth rate to the pre-Covid level reflects that consumer spending is now recovering meaningfully toward normalcy in 2022. Hence, we expect that both the CCI and PCI should gradually recuperate to their pre-Covid levels by mid-2022, when we think most economic activities, including tourism with the absence of a lockdown and travel restrictions, will return to normalcy.

Exhibit 20: Consumer Confidence Index Exhibit 21: Private Consumption Index

Source: Bloomberg


Impact of trade and current accounts on THB currency in 2022. In 1H21, fund flows tilted from inflow to outflow, leading to a weaker THB currency exchange rate. The THB against other currencies, measured in nominal effective exchange rate (NEER) and real effective exchange rate (REER), declined in 1H21, leading to the THB/USD currency exchange rate moving from THB30/USD in the beginning of 2021 to THB33.5/USD in Sep-21.

Exhibit 22: Nominal effective exchange rate Exhibit 23: Real effective exchange rate



(40)

(20)

0

20

40

60

20

40

60

80

100

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

(y-y %)(Index) UTCC Consumer Confidence Index

Retail sales (RHS)

90

95

100

105

110

115

120

125

130

135

140

2010

2010

2011

2011

2012

2012

2013

2014

2014

2015

2015

2016

2017

2017

2018

2018

2019

2019

2020

2021

2021

(Index)PCI seasonal adjusted

(15)

(10)

(5)

0

5

10

15

(50)

(40)

(30)

(20)

(10)

0

10

20

30

40

1994

1995

1997

1998

2000

2001

2003

2004

2006

2007

2009

2010

2012

2013

2015

2016

2018

2019

2021

(y-y %)(y-y %) Nominal Effective Exchange Rate (NEER)


(15)

(10)

(5)

0

5

10

15

(50)

(40)

(30)

(20)

(10)

0

10

20

30

40

50

199

4

199

5

199

7

199

8

200

0

200

1

200

3

200

4

200

6

200

7

200

9

201

0

201

2

201

3

201

5

201

6

201

8

201

9

202

1

(y-y %)(y-y %) Real Effective Exchange Rate (REER)




Current account turned negative in 1H21. The National Economic and Development Council (NEDC) estimates that Thailand’s current account in 2021 will be in a shortfall of THB10.3b, or 2% of GDP – the first deficit year since 2013 – due to the higher import value that far outpaced the export value. This indicates that the Thai private sector has started to import capital goods for investment ahead of the expected economic recovery in 2022, in our view.

In addition, the government’s budget deficit, which is projected to reach 10% of GDP for the 12-month period from Oct-21 to Sep-22, should result in a weaker THB, but we project that the THB/USD currency exchange rate should hover in the range of THB30-34/USD and average THB32-33/USD in 2021. Also, Thailand’s international reserve to GDP remains high at 51%, or USD250b, which we think could support the current account deficit in 2H21 before the current account likely turns to surplus in 2022, in our view.

Exhibit 24: Thailand’s quarterly current a/c balance to GDP Exhibit 25: Thailand’s yearly current a/c balance to GDP



However, in 2022, we expect a combination of a gradual recovery in external demand and subdued domestic demand for imports to drive the current account surplus wider. We project the trade balance to rise to over THB1,000b in 2022, as export value exceeds import value.

Exhibit 26: Thailand’s quarterly trade balance to GDP Exhibit 27: Thailand’s yearly trade balance to GDP

Sources: Bank of Thailand; NESDC

Sources: Bank of Thailand; NESDC

(15)

(10)

(5)

0

5

10

15

20

(300)

(200)

(100)

0

100

200

300

400

500

600

1Q05

1Q06

1Q07

1Q08

1Q09

1Q10

1Q11

1Q12

1Q13

1Q14

1Q15

1Q16

1Q17

1Q18

1Q19

1Q20

1Q21

(%)(THB b)Current a/c balance % of GDP (RHS)

(302

)

85

536

27

765

359

293

(151

)

(257

)

381

954

1,53

5

1,49

1

912

1,18

0

551

(267

)

(6)

(4)

(2)

0

2

4

6

8

10

12

(500)

0

500

1,000

1,500

2,000

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

202

0

1H2

1

(%)(THB b)Current a/c balance % of GDP (RHS)

(5)

0

5

10

15

20

(200)

(100)

0

100

200

300

400

500

1Q05

1Q06

1Q07

1Q08

1Q09

1Q10

1Q11

1Q12

1Q13

1Q14

1Q15

1Q16

1Q17

1Q18

1Q19

1Q20

1Q21

(%)(THB b)Trade balance % of GDP (RHS)

142

514

917

576

1,07

3

840

369

2 13

559

901

1,26

3

1,10

5

720

827

1,28

1

529

0

2

4

6

8

10

12

0

200

400

600

800

1,000

1,200

1,400

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

1H21

(%)(THB b)Trade balance % of GDP (RHS)



Net export growth should remain a key supporting driver for Thai GDP in 4Q21-2022. Export growth economic recoveries in the Euro zone, US, Japan and across Asia, should drive up the demand for the country's goods exports, potentially stabilising the THB in the range of THB31-33/USD, based on our estimate.

Exhibit 28: Thailand exports Exhibit 29: Thailand imports



We believe Thailand’s major export markets, which include the US, EU, China, ASEAN, and Japan, should see strong rebounds in their economic growth in 4Q21-2022 when economic reopenings, albeit gradually, should lead to higher consumption and goods imports which should directly result in stronger exports for Thailand. In particular, the exports of automobiles, computers and electronics components, rubber products, plastic pellets, chemicals, and fruit produce should be key drivers for Thailand’s exports in the next 12 months, in our view.

Exhibit 30: Exports by country in Aug 2021 and 8M21 Exhibit 31: Growth of top ten exports in Aug 2021 and 8M21

--- Export value --- --- Change --- - Contribution -

Aug-21 8M21 Aug-21 8M21 Aug-21 8M21

(USD m) (USD m) (y-y%) (y-y%) (%) (%)

Total exports 21,976 176,962 8.9 15.2 100.0 100.0

Primary market 15,561 124,865 18.2 18.7 70.8 70.6

US 3,441 26,884 16.2 20.6 15.7 15.2

China 3,409 25,169 32.3 27.9 15.5 14.2

Japan 1,909 16,560 10.0 13.5 8.7 9.4

ASEAN (9) 5,144 42,025 15.2 12.9 23.4 23.7

ASEAN (5) 3,206 23,498 26.9 10.8 14.6 13.3

CLMV 1,938 18,527 (0.0) 15.7 8.8 10.5

EU (27) x UK 1,657 14,226 16.1 24.6 7.5 8.0

Secondary market 6,244 50,636 18.4 23.6 28.4 28.6

South Asia 1,017 7,313 54.5 54.2 4.6 4.1

Australia (25) 952 8,638 (15.9) 16.7 4.3 4.9

Middle East (15) 666 5,713 31.9 17.6 3.0 3.2

Others 172 1,461 (90.1) (80.2) 0.8 0.8

Top ten products

Cars & parts 2,004 19,167 17.8 48.5 9.1 10.8

Computers & parts 1,707 14,000 10.5 18.0 7.8 7.9

Rubber products 1,164 9,962 6.5 31.7 5.3 5.6

Plastic pellets 1,027 7,337 55.7 44.7 4.7 4.1

Refined fuels 893 5,393 127.8 47.2 4.1 3.0

Precious stones 881 6,428 (71.9) (57.7) 4.0 3.6

Fruits 825 4,834 125.0 62.4 3.8 2.7

Chemical products 815 6,219 45.1 42.2 3.7 3.5

Electronic circuits 649 5,428 16.5 19.0 3.0 3.1

Machinery & parts 645 5,192 21.8 25.5 2.9 2.9

Source: Ministry of Commerce

Source: Ministry of Commerce

(40)

(30)

(20)

(10)

0

10

20

30

40

50

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

(y-y %)Thailand customs exports

(60)

(40)

(20)

0

20

40

60

80

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

(y-y %)Thailand customs imports

25

19

42

62

(58)

47

45

32

18

48

22

17

45

125

(72)

128

56

7

11

18

(100) 0 100 200

Machinery& parts

Electroniccircuits

Chemicalproducts

Fresh, frozen& dried fruit

Precious stones& jewellery

Refine fuels

Plastic pellets

Rubberproducts

Computer& parts

Cars & parts

(Change y-y %)

Aug-21 8M21



Higher imports in 2021 should be a boon for GDP growth in 2022. In 1H21, Thailand’s import value outpaced the export value mostly due to the higher imports of raw materials and capital goods, which jumped markedly as a result of the higher production levels for automobiles, electronics and computer components, and crude oil – all being major raw materials and capital goods for exports in the future. Thus, we believe that the import value will start to match the export value by 1Q22 and will likely sustain the high export growth that we expect to see in 2022.

Exhibit 32: Imports by economic classification Exhibit 33: Imports of consumer goods

Sources: Bank of Thailand (data for 2021 is data from Jan-Jul); FSSIA’s compilation

Sources: Bank of Thailand (latest import data from 7M21); FSSIA’s compilation

Exhibit 34: Imports of raw materials Exhibit 35: Imports of capital goods



8.5

67.8

28.1

8.6

(13.0)

12.6

63.1

25.5

10.9

(12.0)(20)

0

20

40

60

80

Consumergoods

Rawmaterials

Capitalgoods

OtherImports

Adjustment

(%)1995-2004 2005-2014 2015-2019 2020-2021

(10)

(8)

(6)

(4)

(2)

0

2

4

6

8

10

(40)

(30)

(20)

(10)

0

10

20

30

40

1996

2001

2006

2011

2016

1H21

(y-y %)(y-y %) Consumer goods


(10)

(8)

(6)

(4)

(2)

0

2

4

6

8

10

(40)

(30)

(20)

(10)

0

10

20

30

40

1996

2001

2006

2011

2016

1H21

(y-y %)(y-y %) Raw materials and intermediate goods


(10)

(8)

(6)

(4)

(2)

0

2

4

6

8

10

(50)

(40)

(30)

(20)

(10)

0

10

20

30

40

1996

2001

2006

2011

2016

1H21

(y-y %)(y-y %) Capital goods




Thailand witnessed a surge in foreign investment in 1H21. In 1H21, Thailand’s investment applications increased 14% y-y in terms of the number of projects and 158% y-y in combined value, led by an increase in foreign direct investment applications, sustained growth in target industries, including the electronics and medical sectors, as well as in power generation, according to Thailand’s Board of Investment (BOI).

Exhibit 36: Thailand foreign direct investment Exhibit 37: Advertising spending


Source: Advertising Association of Thailand

Improving economic activities are key. Thailand’s economy is likely to adapt well to living with Covid-19 in the long run, given the country’s efficient healthcare system. Our assumption of reaching an 80% vaccine rollout for the total population by 1Q22 is because we think that the Thai government has responded slowly to the Covid-19 infection rate, focusing on the domestic mortality rate decline rather than aiming to reopen the country’s tourism sector.

In addition, we think that the pandemic’s impact on economic activities will likely subside in 4Q21 and into 2022, thanks to a higher vaccination rate and the country’s effective healthcare system which has already led to falling death and new infection rates.

While we believe that the Thai people have adapted well to the Covid-19 pandemic, we think the impact of the structural shifts in economic activities and consumer behaviours in response to the pandemic will differ in magnitude, particularity across the differing income demographics.

Exhibit 38: Thailand – mobility trend Exhibit 39: Cambodia – mobility trend

Source: Google COVID-19 Community Mobility Reports


8.9 6.4

14.7

2.5

12.9

15.9

5.0

8.9

3.5

8.3

13.2

4.8

(5.0)

4.0

(10)

(5)

0

5

10

15

20

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

1Q21

(USD b)

5

6

7

8

9

10

Jan-

20F

eb-2

0M

ar-2

0A

pr-2

0M

ay-2

0Ju

n-20

Jul-2

0A

ug-2

0S

ep-2

0O

ct-2

0N

ov-2

0D

ec-2

0Ja

n-21

Feb

-21

Mar

-21

Apr

-21

May

-21

Jun-

21Ju

l-21

Aug

-21

(THB b) Ads spending



According to Google’s ‘COVID-19 Community Mobility Reports,’ the Covid-19 situation in Thailand and CLMV, including the US and UK, has already passed the bottom, reflected in the higher economic activities measured in the mobility trend. We think that in 4Q21 onward, when the Thai and other countries’ governments begin to gradually reopen economic activities and transportation, global and Thai GDP growth should rebound piecemeal to reach the pre-Covid level by end-2022, in our view.

Exhibit 40: Myanmar – mobility trend Exhibit 41: Vietnam – mobility trend



Exhibit 42: United Kingdom – mobility trend Exhibit 43: United States – mobility trend



Consumer (financial) spending should gradually return to normalcy in 4Q21 onward. Thailand’s financial activities have been in the doldrums since 1Q20 when Covid-19 hit the country, but we expect the consumer spending for credit and debit cards to rise markedly in 4Q21 onward.



Exhibit 44: Non-bank card spending Exhibit 45: Commercial bank card spending



Three investment themes for the transition period

For the tactical (3-6 month) view for our tri-transition investment theme, we have an Overweight recommendation on the Thai equities market. In the short term, we think that negative sentiment could linger on due to the market’s concerns over the pace of the economic recovery and the potential impact of the US Fed’s and global central banks’ tapering that could gradually dry up financial liquidity. However, we think that the stronger and more visible growth outlook for Thailand’s economy and its corporate earnings growth from the ongoing ‘transitions’ should be key catalysts for a higher SET Index.

We identify the transition investment theme as revolving around three major shifts: 1) transition to growth; 2) transition to normalcy; and 3) transition to green energy, all being sound investment strategies during the transition from the pandemic to post-pandemic period, in our view. In addition, we believe that the Thai economy has bottomed out and that Thailand’s financial system is stable with a high potential for more stimulus measures to be implemented to support the economic recovery.

(26)

(9)(3)

(34)

22 21

3 (0)

(4)

4 10

27

(33)

(3)

21

(13)(18)

9

(11)

(40)

(30)

(20)

(10)

0

10

20

30

0

10

20

30

40

50

60

70

Jan-

20F

eb-2

0M

ar-2

0A

pr-2

0M

ay-2

0Ju

n-20

Jul-2

0A

ug-2

0S

ep-2

0O

ct-2

0N

ov-2

0D

ec-2

0Ja

n-21

Feb

-21

Mar

-21

Apr

-21

May

-21

Jun-

21Ju

l-21

(%)(THB b)Non-bank card spending Change m-m (RHS)

Lockdow n Lockdow n

Start lockdow n easing

(17)(14)(11)

(37)

19 24

0 4

(3)1

7 22

(28)

(4)

22

(17)(15)

11

(11)

(50)

(40)

(30)

(20)

(10)

0

10

20

30

0

20

40

60

80

100

120

140

160

Jan-

20F

eb-2

0M

ar-2

0A

pr-2

0M

ay-2

0Ju

n-20

Jul-2

0A

ug-2

0S

ep-2

0O

ct-2

0N

ov-2

0D

ec-2

0Ja

n-21

Feb

-21

Mar

-21

Apr

-21

May

-21

Jun-

21Ju

l-21

(%)(THB b)Bank card spending Change m-m (RHS)

Lockdow n Lockdow n

Start lockdow n easing



Theme #1: Transition to growth

We define the ‘transition to growth’ as the emerging technologies blurring the traditional borders between geography, technology, and consumers’ propensity for more online convenience and made-to-order products and services. As a result, companies and industries are scrambling to find the best strategies to not only ensure the survival of the fittest but also to capture the growth opportunities in the fast-changing and dynamic industry environment.

A number of Thai listed companies have already announced their strategies to form JVs and partnerships in order to assemble the right mix of ecosystem players to remain competitive and enable business transformation to continue apace. The challenge lies in identifying the right strategic partners to tap into external talent networks and innovative resources in an ecosystem with unique, complementary skills. Among the companies under FSSIA’s coverage in this theme, our top picks are SCB, JMT and NCAP.

Siam Commercial Bank (SCB TB, BUY, TP THB158): From linear to exponential growth via digital platform

We retain SCB as our banking top pick, with our SOTP-based TP of THB158. We think that SCB has the best position in the banking sector to benefit from the region’s digital age with its integrated digital platform. Moreover, we are convinced that the proactive long-term debt restructuring program it offers to its clients should solve the prolonged asset quality problem. We believe SCB should deliver solid performance in the next two years. We also expect its dividend payout ratio to increase. Thus, shareholders would benefit from the expected ROE uplift.

Exhibit 46: SCB – net profit growth Exhibit 47: SCB – dividend yield



(9.4)(7.1)

(9.4) (9.4)

18.2

13.5 15.6

(15)

(10)

(5)

0

5

10

15

20

20,000

25,000

30,000

35,000

40,000

45,000

2017 2018 2019 2020 2021E 2022E 2023E

(%)(THB m) Net profit Change y-y (RHS)

5.50 5.50 6.25 2.30 7.70 3.50 4.75

4.2 4.2 4.8

1.8

5.9

2.7

3.7

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

8

9

2017 2018 2019 2020 2021E 2022E 2023E

(%)(THB/share)

Dividend payment Dividend yield (RHS)



JMT Network Services (JMT TB, BUY, TP THB57.00): A stock to hedge against the economic downturn

We reiterate JMT as our asset management top pick, as we believe the company will deliver outstanding net profit vs its peers in both the short term, especially in 4Q21, and the long term. We view JMT as a stock to hedge against the economic downturn, supported by its unsecured portfolio. It should also grow with the economic recovery via its secured portfolio.

Exhibit 48: JMT – net profit forecasts


Next Capital (NCAP TB, BUY, TP THB16.80): Fully equipped tech lending

We reiterate our BUY call on NCAP as we expect it to deliver outstanding net profit growth at a 38% three-year CAGR from 2020-23. With the support of its major shareholders and its new highly experienced management, NCAP should be able to successfully transform itself from a motorcycle hire purchase lender to a fully-equipped tech lender.

Exhibit 49: NCAP should deliver solid net profit growth Exhibit 50: NCAP – total loan growth

Sources: Company data; FSSIA estimates

Sources: Company data; FSSIA estimates

1,308 1,308 1,353 1,353 1,504 1,598 2,208 2,208 2,279 2,301

2,650 2,670 3,210 45 0 151 94

610 72 22 349 19

540

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2021

E N

et p

rofit

Deb

t rep

aym

ent

Nor

mal

NP

Lac

qui

sitio

ns w

ithno

fin

anci

al c

ost

Incr

emen

tal

NP

Lac

quis

ition

sfro

m u

nlo

ckin

gso

urce

of f

unds

Par

kin

gre

ma

inin

gca

pita

l in

low

-ris

k fin

anci

al

inst

rum

ent

Net

pro

fit fr

omno

rmal

bu

sine

ss

2022

E N

et p

rofit

Deb

t rep

aym

ent

Nor

mal

NP

Lac

qui

sitio

ns w

ithno

fin

anci

al c

ost

Incr

emen

tal

NP

Lac

quis

ition

sfro

m u

nlo

ckin

gso

urce

of f

unds

Par

kin

gre

ma

inin

gca

pita

l in

low

-ris

k fin

anci

al

inst

rum

ent

Net

pro

fit fr

omno

rmal

bu

sine

ss

2023

E N

et p

rofit

(THB m)

Interest savings

Interest savings

Capital increase impact Capital increase impact

126 202 315 420 528

40

6056

33

26

0

10

20

30

40

50

60

70

0

100

200

300

400

500

600

2019 2020 2021E 2022E 2023E

(%)(THB m)Net profit Change y-y (RHS)

15

(2)

30

35

30

(5)

0

5

10

15

20

25

30

35

40

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2019 2020 2021E 2022E 2023E

(%)(THB m)Loan Change y-y (RHS)



Theme #2: Transition to normalcy While Covid-19 infections are likely to persist over the next few years, we think that the Thai economy should be able adapt itself to live with Covid-19, and we expect economic growth to return to normalcy by end-2022. Under this circumstance, we have identified three domestic sectors as our top sector picks, with CPALL and HMPRO as our stock picks in the commerce sector, AOT and BA in the tourism sector, and DMT in the transportation sector.

The commerce sector has been hard hit by the surging Covid infections since Jun-21. The Thai government had implemented a number of full lockdown measures in dark-red zones from 23 Jul to 31 Aug-21. We expect consumer sentiment to improve beginning in Sep-21, commensurate with the lockdown easing. As a result, we think the average same-store-sales-growth (SSSG) rate of Thai retailers should have hit the bottom in Aug-21, with a gradual recovery occurring in Sep-21 from an average SSSG of -7.0% in 3Q21 and -8.9% in 2Q21. We expect 4Q21 SSSG to turn positive in the low to mid-single digits on the back of pent-up demand, school reopenings, and domestic travel.

Our top picks in the sector are CPALL and HMPRO. We prefer CPALL as it is 1) a catch-up play in the commerce sector; 2) should be a key beneficiary of both domestic and international tourism recoveries; 3) should have no short-term dilution effect from the Lotus deal; and 4) the long-term synergy creation between MAKRO and Lotus should indirectly pass through to CPALL. Its current share price is trading at 33x 2022E P/E, or at its 5-year average, but could potentially drop to only 25x if its earnings recover to their pre-Covid level by 2022.

We also like HMPRO as we project its earnings to exceed their pre-Covid level at THB6.7b by 2022. An earnings recovery should start in 4Q21 and continue into 2022. HMPRO is now attractive, trading at c25% below its pre-Covid peak of THB18.6 and its current share price is trading at 27x 2022E P/E, or at -1.0SD of its 5-year mean of 33x.

Exhibit 51: SSSG of most retailers bottomed out in Aug 2021 Exhibit 52: HMPRO – SSSG



Exhibit 53: CPALL – SSSG trend Exhibit 54: CPALL – earnings accretion after the restructuring


Note; Case1 assumes Lotus’ net profit at THB4.6b, Case2 assumes Lotus’s net profit at THB5.7b, and Case3 assumes Lotus’ net profit at THB6.9b; Source: FSSIA estimates

(40)

(30)

(20)

(10)

0

10

20

30

40

1Q21 2Q21 Jul-21 Aug-21 Sep-21 4Q21E

(%) CPALL MAKRO HMPRO

GLOBAL BJC (BigC) CRC 7.0

7.2

3.7

4.0

(1.4

) 1.1

(0.8

) 1.1

0.9

(8.5

)

(4.0

)

4.0 5.

0 (10)

(8)

(6)

(4)

(2)

0

2

4

6

8

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

E

2022

E

2023

E

(%)SSSG

4.8

13.0

5.7

(2.6

)

0.9 2.

4

1.6 3.

2

1.7

(14.

5)(6

.6)

6.0 8.

0

(20)

(15)

(10)

(5)

0

5

10

15

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

E

2022

E

2023

E

(%)SSSG

17.0 17.0 17.0 17.0 17.6 18.2

0

2

4

6

8

10

12

14

16

18

20

Case 1 Case 2 Case 3

(THB b)Before restructuring After restructuring



Tourism: the recovery lies ahead

Despite the slow recovery of Thai tourism due to the surging Covid infections over Jun-Aug, we expect a recovery to start in 4Q21. Airlines have been allowed to resume domestic flights from 1 Sep following the easing of restrictions in high-risk provinces. We expect domestic tourism to gradually ramp up to 60-80% of the pre-Covid level in 4Q21-1Q22, driven by the pent-up demand from Thai travellers and the stimulus packages from the government to boost domestic tourism. In addition, the Thai government plans to reopen five additional provinces for the second phase of the country’s reopening plan, including Bangkok, Chiang Mai, Chon Buri, Phetchaburi, and Prachuap Khiri Khan in Nov after the first phase reopened Phuket, Samui and Krabi. Thailand plans to reopen up to 43 provinces by Jan-22.

Our top picks in the aviation sector are AOT and BA. We like AOT as we believe it would be the first tourism stock whose earnings exceed the pre-Covid level, led by higher revenue from new concession contracts with King Power. AOT has waived the minimum guarantee for concession contracts until Mar-22. Thus, its concession revenue should accelerate from 2HFY22 onward. We estimate concession revenue to jump from THB17.5b in FY19 to THB27.0b in FY23. This would support its turnaround and post-Covid earnings growth.

We also like BA due to its favourable risk/reward ratio. It trades at 15-17x 2023E P/E, compared with other tourism stocks (hotel operators and AOT) at 25-35x. We think BA’s multiple has the potential to rerate to 20-30x as it transforms from an airline to an airport operator. We estimate that after BA terminates the lease contract for Samui Airport with Samui Airport Property Fund, its airport-related EBIT contribution should jump to 48% in 2023, while its airline business EBIT should contribute only 12%. In addition, we forecast its non-airline business to contribute up to THB1.6b in profit to BA in 2023.

Lockdown easing to benefit DMT

Although the number of daily new Covid cases in Thailand remains high at over 11k per day based on a 7-day moving average as of 29 Sep-21, we believe that out-of-home (OOH) activity should start to resume gradually. According to the data from the Ministry of Public Health on 21 Sep-21, 42% of Bangkok residents have been fully vaccinated, while 97.5% have gotten their first shot. Therefore, we believe this will boost consumer confidence and encourage OOH activity, even though the number of Covid cases remains high.

We believe the recovery momentum will continue in line with the restrictions that the government expects to relax in the future, possibly in the beginning of Oct-21, as well as with the vaccination rollout that should continue to increase. Although the number of Covid cases remains high, the transition to normalcy for the Thai people, especially Bangkok residents, should help consumers to learn to live with Covid-19 in the future.

We like DMT as our top pick in the land transportation sector. DMT’s ridership should gain two benefits from the restriction easing starting in Sep-21, including 1) the resumption of OOH activities, which should increase the demand for expressway usage; and 2) the return of airline services. Domestic air travel has resumed in Covid-19 dark-red zones in Sep-21.

Moreover, DMT is the most underperforming stock among expressway operators. We believe that this is because DMT is not covered by Bloomberg consensus; FSSIA is the only research house covering DMT. This can imply that the market has less information on DMT as it is a relatively newly listed company and has had poor performance on its share price after its IPO due to the Covid-19 impact.



Theme #3: Transition to green energy

Since 2020, the Thai government has faced many challenges that have made CO2 reduction efforts less efficient, including 1) the demand downside from the impact of the Covid-19 pandemic; 2) the faster and stronger-than-expected demand for electricity for new sources, such as electric vehicles (EVs), the Eastern Economic Corridor campaign, and independent power supply (IPS) or power plants with private power purchase agreements; and 3) the megatrend of increasing renewable energy to reduce carbon emissions and capitalise on the highly competitive cost of renewable energy, including solar and wind farms and the use of energy storage systems.

Exhibit 55: CO2 emissions by energy type Exhibit 56: CO2 emissions by segment

Source: Energy Policy and Planning Office (EPPO)

Source: EPPO

Decarbonisation goal. During Thailand’s transition from a fossil-based to a green, renewable-focused energy country, the Thai government has clearly targeted a reduction in carbon emissions via 1) lower coal-fired power capacity; 2) higher renewable capacity; 3) shifting from internal combustion engine-based vehicles to EVs; and 4) importing higher gas volumes in the form of LNG as a transition fuel.

Exhibit 57: CO2 emissions per GDP Exhibit 58: CO2 emissions per capita

Source: EPPO

Source: EPPO

0

50

100

150

200

250

300

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

(m tons) Oil Coal/Lignite Natural Gas

0

50

100

150

200

250

300

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

(m tons) Power Generation Transport Industry Other Sectors

22

23

24

25

26

27

28

29

30

31

32

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

(tons/THB m) CO2 Emission per GDP

2.0

2.5

3.0

3.5

4.0

4.5

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

(tons/person) CO2 Emission per Capita



The success of past government plans for carbon reduction. In the past 25 years, since 1996, the Thai government has successfully reduced CO2 emissions per unit, reflected in the lower CO2 emissions per GDP, per capita, per kWh of electricity, and per primary energy consumption.

Exhibit 59: CO2 emissions per kWh Exhibit 60: CO2 emissions per primary energy consumption

Source: EPPO

Source: EPPO

However, given that Thailand is scarce in natural resources like gas, coal, and oil, the country needs to import oil, gas, and coal for its power generation and transportation needs. In the past 15 years, Thailand has seen its reserve-to-production ratio significantly decline by 3x, and as of 2019 the country has only 4-5 years of proved reserves of gas, oil, lignite, and condensate.

Exhibit 61: Reserve-to-production ratio Exhibit 62: Reserve-to-production ratio as of 2019

Source: EPPO

Source: EPPO

Amid the higher import value for energy, which has accounted for 8-15% of GDP in the past 10 years, Thailand has somewhat successfully reduced the final energy consumption to GDP with a lower self-sufficiency ratio of 52%, down from 60% in 2009-14, as the country has had to rely more on imports of energy and electricity.

As a result, we think that during the transition period from a fossil-based to a green-based country, Thailand will still have to rely significantly on fossil energy, including oil, gas, and coal. Meanwhile, the transition to green energy for the automotive industry is moving at a faster rate than other industries, thanks to the government’s heavy promotional and subsidy policies in the past 12 months.

0.40

0.45

0.50

0.55

0.60

0.65

0.70

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

7M21

(kg/kWh) CO2 Emission per kWh

1.9

2.0

2.0

2.1

2.1

2.2

2.2

2.3

2.3

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

7M21

(k tons/ktoe) CO2 Emission per Primary Energy Consumption

0

20

40

60

80

100

120

140

0

2

4

6

8

10

12

14

16

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

(years)(years) Natural Gas Condensate

Crude Oil Lignite (RHS)

3.7 3.4 2.7 130.40

20

40

60

80

100

120

140

Natural Gas Condensate Crude Oil Lignite

(years)



Significantly, Thailand has achieved its target to gradually reduce the capacity proportion of coal-fired power plants, which has declined from 18% in 2015 to 16% in 1H21, thanks in part to higher renewable and gas-fired power plant capacities. The higher power supply contribution from renewables and imports has doubled from 7% in 2015 to 14% in 1H21, mainly from the commercial operation date commencement of the 1.2GW Xaiyaburi hydropower plant since Oct-19.

Exhibit 63: Energy intensity Exhibit 64: Self-sufficiency ratio

Source: EPPO

Source: EPPO

7.2

7.4

7.6

7.8

8.0

8.2

8.4

8.6

8.8

9.0

9.2

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

6M21

(toe/THB m) Final energy consumption/GDP

46

48

50

52

54

56

58

60

62

64

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

7M21

(%)Self-sufficiency ratio



Oil sector top picks are PTTEP and TOP. We prefer companies with high earnings exposures to the oil and gas prices, both directly and indirectly. PTTEP and TOP are our top oil plays, given their high earnings exposures to the oil & gas prices (PTTEP as a producer of oil & gas) and as potential winners of the expected rebound in the demand for refined oil after the global reopening (TOP).

Exhibit 65: Net profit breakdown by oil, gas, and others

*EBITDA breakdown for BCP, IRPC, and IVL Sources: Company data; FSSIA estimates

BANPU and IVL are top picks for gas price plays. Our top picks are BANPU and IVL as the winners of the current gas price uptrend. BANPU has 0.8bscfd of gas production capacity in the US and IVL has a large exposure to shale gas as a key feedstock for its 4mtpa integrated oxide and derivatives (IOD) product group in the US. Additionally, the higher Henry Hub (HH) gas price should directly benefit BANPU’s shale gas unit, while the high HH price should indirectly widen the margin of IVL’s PET and PTA sold in North America. As one of three major producers of PET and PTA, IVL has high bargaining power to raise the contract and spot selling prices of its PET, PTA and IOD products produced from gas-based ethylene.

Power industry is the key mover in the transition to green energy. From the past three power development plans (PDPs), which include PDP 2015, PDP 2018, and PDP Revision 1 (PDPR1), Thailand has successfully raised its power generating capacity from renewables from 5% of total capacity in 2015 under PDP 2015 to 9% in 2018 under PDP 2018 and 11% in 1H21 under PDPR1. This has effectively reduced carbon emissions by 5-8%, according to the Energy Policy and Planning Office (EPPO).

Exhibit 66: Thailand’s electricity capacity breakdown by energy type

Exhibit 67: Thailand’s electricity capacity breakdown by energy type – PDP 2015, PDP 2018, and PDP 2018 Revision 1

Source: EPPO

Source: EPPO

50

100

46

70

30

52

80

58

31

50

70

20

58

5050 54

30 48 42

11

-

10

20

30

40

50

60

70

80

90

100

TOP SPRC BCP* ESSO PTTGC IRPC* IVL* SCC PTT PTTEP

(%) Oil Gas Others

-

50,000

100,000

150,000

200,000

250,000

2015 2018 6M21

(GWh)Hydro Fuel Oil Coal & LigniteNatural Gas Diesel ImportedRenewable

18 18 16

67 57 56

7 13 14

5 9 11

-

10

20

30

40

50

60

70

80

90

100

2015 2018 6M21

(%)Hydro Fuel Oil Coal & LigniteNatural Gas Diesel ImportedRenewable



EA and NEX are two top picks for EV growth plays. EA and NEX stand out as the only two major players to harness Thailand’s upcoming demand growth for EVs, thanks to their ready-to-deliver EV manufacturing plant (Absolute Assembly) and NEX’s extensive distribution and marketing network for e-buses and e-trucks.

Following the announcement by Thailand’s National Electric Vehicle Policy Committee (NEVPC) for the new zero-emission vehicle targets for the vehicles used and produced during 2021-35, we believe that Thailand’s EV industry is now positioned to see accelerated demand growth in the next 15 years.

In our view, the gradual target increases – from 4% in 2022 to 100% in 2035 for new EVs registered, and from 2% in 2022 to 50% in 2035 for total vehicles produced – will provide two key frameworks for the EV industry participants to ride the global and domestic demand growth for EVs, transforming Thailand’s internal combustion engine industry into a full EV industry by 2035.

Exhibit 68: EV usage target Exhibit 69: EV production target

Source: NEVPC

Source: NEVPC

Under the two EV targets, the NEVPC also announced usage target breakdowns for each vehicle type, including 1) a passenger car and pickup truck target of 0.4m in 2025, rising to 6.4m in 2035 (36% of current usage in 2020); 2) a motorcycle target of 0.62m in 2025 and 8.8m in 2035 (44%); and 3) a bus and truck target of 0.03m in 2025 rising to 0.4m in 2035 (31%). Hence, the most aggressive EV target is for motorcycles (44% in 2035), followed by EV passenger cars and pickup trucks (36%) and e-buses and e-trucks (31%).

Exhibit 70: Thailand’s battery EV production targets by major manufacturers

Exhibit 71: Thailand’s EV use and production targets

Source: Industry Ministry

Source: Industry Ministry

0

10

20

30

40

50

60

70

80

90

100

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2022E 2025E 2030E 2035E

(%)(cars) No. of EVs % of total vehicles in use (RHS)

0

10

20

30

40

50

60

0

1

2

3

4

5

6

7

8

9

2022E 2025E 2030E 2035E

(%)(m cars)No. of EVsAccumulated% of total vehicle production (RHS)



Earnings growth and attractive valuations underline our top picks

We retain our Overweight recommendation on the Thai equity market with our SET Index target of 1,700 by end-2021, driven by:

1) Improving corporate profit growth on the SET, led by the energy, petrochemical and utilities sectors. We project that the net profit growth of the key sectors under our tri-transition investment theme will be strong, including energy, power, commerce, tourism, finance, and transportation.

2) A Thai economic recovery, driven by higher export volumes and domestic consumption after the relaxation of the country’s lockdown. We believe that the declining new infection rate and death cases should allow Thailand to gradually return to normalcy by end-2022.

For Oct-21, we expect the SET Index to remain rangebound between 1,600-1,670 with the transition investment theme. Among our top picks in our favoured sectors, BANPU and EA are our picks for the ‘transition to green energy’, JMT, NCAP, and SCB are our picks for the ‘transition to growth’, and CPALL, HMPRO, BA, AOT, and DMT are our picks for the ‘transition to normalcy’.

Exhibit 72: Valuation summary of our top picks as of 29 September 2021

Company BBG ----Share price --- Up ------------- Recur profit ----------- Rec profit grth ----- P/E ----- DivYld ROE P/BV

code Current Target side 20 21E 22E 21E 22E 21E 22E 21E 21E 21E

(THB) (THB) (%) (THBm) (THBm) (THBm) (%) (%) (x) (x) (%) (%) (x)

Banpu BANPU TB 12.70 14.60 15 (3,288) 8,905 8,002 nm (10) 7.8 11.4 6.1 12.7 0.9

Energy Absolute EA TB 62.25 76.00 22 5,155 8,192 9,742 59 19 28.3 23.8 0.4 26.1 6.7

CP All CPALL TB 62.75 76.00 21 15,876 10,406 17,014 (34) 64 54.2 33.1 0.7 10.4 6.8

Home Product Center HMPRO TB 13.60 18.50 36 5,155 5,863 6,745 14 15 30.5 26.5 2.5 26.3 7.8

Don Muang Tollway DMT TB 12.80 17.00 33 791 385 979 (51) 154 39.2 15.4 5.7 4.5 1.6

Airports of Thailand AOT TB 62.00 80.00 29 3,236 (15,116) 3,570 nm nm nm nm 0.8 (11.8) 7.8

Siam Commercial Bank SCB TB 124.50 158.00 27 27,218 32,171 36,527 18 14 13 12 6.2 7.6 1.0

JMT Network Services JMT TB 45.25 57.00 26 1,047 1,308 2,208 25 69 38.4 29.7 1.6 18.7 6.1

Next Capital NCAP TB 11.00 16.80 53 202 315 420 56 33 31.5 23.6 0.5 17.4 5.1

Bangkok Airways BA TB 11.40 16.00 40 (4,316) (3,636) 61 nm nm (6.6) 389.9 0.0 (20.5) 1.5

Sources: Bloomberg; FSSIA estimates

Earnings growth forecasts for our sector picks. Based on the 2022 earnings growth forecasts by FSSIA, we project the earnings growth of the commerce sector to be the highest at 64% y-y in 2022, followed by utilities (+36%), energy (+15%), and banks (14%) vs the average 21% y-y earnings growth in 2022 for the companies under FSSIA’s coverage (122 stocks covering 79% of the SET’s market cap).

While the earnings growth for the tourism and transportation sectors, the two sectors that were hardest hit by the Covid-19 pandemic, are projected to improve only marginally in 2022, their earnings should turn around from net losses to become profitable. Hence, we think that both the tourism and transportation sectors should be even more attractive investment choices as turnaround and growth sectors. Within the tourism and transportation sectors, we prefer AOT, BA, and DMT as key beneficiaries of the country’s reopening and the return of tourism to Thailand.



Exhibit 73: Earnings growth of FSSIA’s top sector picks


Exhibit 74: Net profit of FSSIA’s top sector picks


59

12

(9)

118

42

21 14

64

15

36

(20)

0

20

40

60

80

100

120

Coverage Banks Commerce Tourism Transport Energy Utilities only

(y-y %) 2021E 2022E

n/a n/a n/a n/a

129

31

(21) (17)

280

69

147

50

3 13

321

94

(50)

0

50

100

150

200

250

300

350

Banks Commerce Tourism Transport Energy Utilities only

(THB b)2021E 2022E



Attractive valuations. Valuation-wise, we believe our top sectors – energy, utilities, banks, commerce, tourism, and transportation – are attractive for their stronger net profit growth outlooks in 4Q21-2022 and the valuation discounts compared with their historical averages.

Among our preferred sectors, we think banks and energy are the two most attractive sectors, as they are trading at deep discounts to their 5-year average valuations, while the commerce and finance sectors are trading at or +1 std over their 5-year average levels due to their highly resilient earnings and more sustainable business models vs the cyclical energy and bank sectors, in our view.

Lastly, for the tourism and transportation sectors, while their valuations are trading at 1 std above their 5-year averages, we think this is due to the depressed earnings levels caused by the prolonged lockdowns. However, as we expect the lockdown easing and the economic reopening to occur in Oct-21, we think that the earnings recovery for the tourism and transportation sectors should result in a sharp drop in their forward valuation multiples (EV/EBITDA for transportation and forward P/BV for tourism). This should lead to much more attractive valuations for their earnings growth performance in 2022.

Exhibit 75: Energy rolling one-year forward EV/EBITDA band Exhibit 76: Transportation rolling one-year forward EV/EBITDA band

Source: Bloomberg consensus


Exhibit 77: Commerce rolling one-year forward P/E band Exhibit 78: Commerce rolling one-year forward P/BV band



3

5

7

9

11

13

15

2016

2017

2018

2019

2020

2021

SETENERG EV/EBITDA (x)

std +2 = 11.5x

std +1 = 9.9x

5Y-avg = 8.3x

std -1 = 6.6x

std -2 = 5x

0

10

20

30

40

50

6020

16

2017

2018

2019

2020

2021

SETTRANS EV/EBITDA (x)

std +2 = 57.6x

std +1 = 43.9x

5Y-avg = 30.2x

std -1 = 16.5x

std -2 = 2.8x

15

20

25

30

35

40

45

50

2016

2017

2018

2019

2020

2021

SETCOM PER (x)

std +2 = 42.7x

std +1 = 37.5x

5Y-avg = 32.2x

std -1 = 27x

std -2 = 21.7x

3.0

3.5

4.0

4.5

5.0

5.5

2016

2017

2018

2019

2020

2021

SETCOM PBV (x)

std +2 = 4.9x

std +1 = 4.5x

5Y-avg = 4.2x

std -1 = 3.8x

std -2 = 3.4x



Exhibit 79: Banks rolling one-year forward P/BV band Exhibit 80: Finance rolling one-year forward P/BV band



Exhibit 81: Tourism rolling one-year forward P/BV band Exhibit 82: SET Index rolling one-year forward P/E band



0.2

0.4

0.6

0.8

1.0

1.2

1.4

2018

2019

2020

2021

SETBANK PBV (x)

std +2 = 1.3x

std +1 = 1x

3Y-avg = 0.8x

std -1 = 0.6x

std -2 = 0.3x

1.5

2.0

2.5

3.0

3.5

4.0

2018

2019

2020

2021

SETFIN PBV (x)

std +2 = 3.5x

std +1 = 3.1x

3Y-avg = 2.7x

std -1 = 2.3x

std -2 = 1.9x

0.5

1.0

1.5

2.0

2.5

3.0

2016

2017

2018

2019

2020

2021

SETHOT PBV (x)

std +2 = 2.6x

std +1 = 2.3x

5Y-avg = 1.9x

std -1 = 1.6x

std -2 = 1.2x

12

14

16

18

20

2220

16

201

7

201

8

201

9

202

0

202

1

SET index PER (x)

std +2 = 20.5x

std +1 = 18.8x

5Y-avg = 17x

std -1 = 15.3x

std -2 = 13.6x



Appendix – FSSIA’s 122 companies under coverage

Exhibit 83: FSSIA’s 122 companies under coverage – summary of key valuations as of 29 Sep 2021 (1/4)

BBG Rec ----Share price --- Up (down) Market ----------- Recur profit ------------- Recur profit

growth ------- P/E ------- DivYld ROE PBV

Code Current Target side Cap 2020 21E 22E 21E 22E 21E 22E 21E 21E 21E

(THB) (THB) (%) (USD m) (THB m) (THB m) (THB m) (%) (%) (x) (x) (%) (%) (x)

SET Index 1,617 1,700 5 546,988 19.4 16.5

Coverage 399,077 457,060 727,325 880,710 59.1 21.1 18.4 15.7 2.8 10.0 1.8

Banks 40,307 115,872 129,236 147,356 11.5 14.0 10.9 9.5 4.3 7.2 0.8

Bangkok Bank BBL BUY 120.00 146.00 22 6,763 21,181 24,245 27,445 14.5 13.2 9.4 8.3 3.3 5.4 0.5

Kasikornbank KBANK BUY 137.50 150.00 9 9,619 29,487 31,325 34,198 6.2 9.2 10.4 9.5 2.0 6.9 0.7

Kiatnakin Bank KKP BUY 55.50 65.00 17 1,388 5,123 5,695 6,412 11.2 12.6 8.3 7.3 4.5 11.9 0.9

Krung Thai Bank KTB HOLD 11.20 12.70 13 4,622 16,687 19,186 21,898 15.0 14.1 8.2 7.1 4.3 5.5 0.4

Siam Commercial Bank SCB BUY 124.50 158.00 27 12,482 27,218 32,171 36,527 18.2 13.5 13.2 11.6 6.2 7.6 1.0

Tisco Financial TISCO BUY 92.50 122.00 32 2,187 6,063 6,613 7,519 9.1 13.7 11.2 9.9 7.1 16.4 1.8

TMBThanachart Bank TTB BUY 1.14 1.40 23 3,248 10,112 10,002 13,358 (1.1) 33.6 11.0 8.2 3.6 4.8 0.5

Diversified financials 21,069 31,219 35,907 43,933 15.0 22.4 22.8 18.6 2.1 19.4 3.8

Unsecured-loan lender 5,557 9,022 11,172 12,847 23.8 15.0 18.6 16.1 2.2 26.2 4.5

Aeon Thana Sinsap (TH) AEONTS BUY 183.00 274.00 50 1,351 3,690 4,461 5,100 20.9 14.3 10.3 9.0 2.9 24.0 2.3

Krungthai Card KTC HOLD 55.25 73.00 32 4,206 5,332 6,710 7,747 25.8 15.4 21.2 18.4 1.9 26.9 5.2

Auto-title lender 9,072 12,700 13,959 17,093 9.9 22.5 22.2 18.2 1.3 20.8 4.1

Muangthai Capital MTC BUY 58.25 67.00 15 3,646 5,214 5,374 6,637 3.1 23.5 23.0 18.6 0.7 23.4 4.9

Srisawad Corp SAWAD BUY 63.25 86.00 36 2,564 4,508 4,827 5,723 7.1 18.6 17.8 15.0 2.9 20.7 3.5

Saksiam Leasing SAK BUY 8.35 12.20 46 517 562 610 854 8.6 40.0 28.7 20.5 1.0 12.9 3.5

Ngern Tid Lor TIDLOR BUY 34.25 47.00 37 2,345 2,416 3,147 3,878 30.3 23.2 24.5 20.5 0.6 18.7 3.5

Truck lender 1,490 2,439 2,691 3,501 10.4 30.1 22.8 20.5 2.4 14.1 2.7

Micro Leasing MICRO BUY 7.55 10.70 42 208 135 204 272 50.8 33.5 34.7 26.0 0.9 10.8 3.6

Singer Thailand SINGER BUY 40.75 51.00 25 599 443 685 1,142 54.5 66.7 30.0 29.3 1.3 13.0 3.3

Ratchthani Leasing THANI BUY 4.08 5.20 27 682 1,860 1,802 2,087 (3.1) 15.8 12.8 11.1 3.9 16.0 2.0

Asset management 3,597 3,043 3,648 5,475 19.9 50.1 34.4 25.7 2.1 11.3 3.6

Bangkok Commercial AM BAM BUY 18.50 19.40 5 1,765 1,841 2,089 2,879 13.5 37.8 28.6 20.8 3.0 4.8 1.3

Chayo Group CHAYO BUY 12.10 18.80 55 341 155 251 388 61.8 54.7 47.2 33.8 0.0 12.8 4.2

JMT Network Services JMT BUY 45.25 57.00 26 1,491 1,047 1,308 2,208 25.0 68.7 38.4 29.7 1.6 18.7 6.1

Other 1,060 3,814 4,122 4,599 8.1 11.6 8.7 7.8 8.8 6.4 0.5

Thanachart Capital TCAP HOLD 34.25 35.00 2 1,060 3,814 4,122 4,599 8.1 11.6 8.7 7.8 8.8 6.4 0.5

Hire purchase motorcycle 292 202 315 420 55.9 33.4 31.5 23.6 0.5 17.4 5.1

Next Capital NCAP BUY 11.00 16.80 53 292 202 315 420 55.9 33.4 31.5 23.6 0.5 17.4 5.1

Information Services 222 114 157 226 37.1 44.2 45.2 33.3 1.1 23.1 5.5

Ditto (THAILAND) DITTO BUY 17.10 21.00 23 222 114 157 226 37.1 44.2 45.2 33.3 1.1 23.1 5.5

Commerce 41,886 33,510 30,655 50,305 (8.5) 64.1 (14.1) 35.6 1.4 13.6 6.4

Berli Jucker BJC HOLD 33.25 39.00 17 3,934 3,914 5,556 6,590 42.0 18.6 24.0 20.2 3.8 4.9 1.2

CP All CPALL BUY 62.75 76.00 21 16,643 15,876 10,406 17,014 (34.5) 63.5 54.2 33.1 0.7 10.4 6.8

Central Retail Corp CRC BUY 34.00 40.00 18 6,054 46 (591) 3,766 nm nm (347.3) 54.5 0.0 (1.1) 3.9

Siam Global House GLOBAL BUY 21.00 27.00 29 2,853 1,956 2,887 3,214 47.6 11.3 32.0 28.8 1.2 16.2 5.0

Home Product Center HMPRO BUY 13.60 18.50 36 5,281 5,155 5,863 6,745 13.7 15.0 30.5 26.5 2.5 26.3 7.8

Siam Makro MAKRO HOLD 50.25 52.00 3 7,121 6,563 6,533 12,977 (0.5) 98.6 36.9 43.3 1.9 28.1 10.0

Food & Beverage 14,059 32,525 30,376 32,901 (6.6) 8.3 21.6 18.8 3.5 19.1 4.8

Foods 7,353 25,652 23,236 24,662 (9.4) 6.1 11.9 10.6 4.7 12.5 1.5

Charoen Pokphand Foods CPF BUY 25.75 34.00 32 6,396 24,537 21,563 22,513 (12.1) 4.4 10.3 9.8 5.0 10.9 1.2

Asian Sea Corporation ASIAN BUY 17.70 24.10 36 425 715 1,004 1,089 40.5 8.4 14.3 13.2 3.5 25.9 3.4

Agripure Holdings APURE BUY 8.10 12.00 48 222 305 376 558 23.2 48.4 20.0 13.5 2.1 19.7 3.8

Srinanaporn Marketing SNNP BUY 10.90 15.00 38 309 94 292 502 211.6 71.7 35.8 20.8 2.4 20.7 4.0

Beverage 6,706 6,874 7,140 8,239 3.9 15.4 32.2 27.7 2.2 26.4 8.3

Carabao Group CBG BUY 123.50 173.00 40 3,646 3,525 3,500 4,225 (0.7) 20.7 35.3 29.2 1.2 32.8 10.9

Osotspa PCL OSP BUY 34.50 42.00 22 3,060 3,349 3,641 4,014 8.7 10.3 28.5 25.8 3.3 18.8 5.3





BBG Rec ---Share price --- Up (down) Market ----------- Recur profit ------------- Recur profit

growth --------- P/E ------ DivYld ROE PBV

Code Current Target side Cap 2020 21E 22E 21E 22E 21E 22E 21E 21E 21E

(TB) (THB) (THB) (%) (USD m) (THB m) (THB m) (THB m) (%) (%) (x) (x) (%) (%) (x)

SET Index 1,617 1,700 5 546,988 19.4 16.5

Coverage 399,077 457,060 727,325 880,710 59.1 21.1 18.4 15.7 2.8 10.0 1.8

Property 13,583 26,268 27,794 33,424 5.8 20.3 33.9 20.1 3.5 9.4 2.4

Property Devel 6,488 20,647 23,453 25,409 13.6 8.3 10.1 9.2 6.6 12.9 1.3

AP (Thailand) AP BUY 8.15 10.50 29 757 4,227 4,230 4,389 0.1 3.8 6.1 5.8 5.8 13.8 0.8

Land and Houses LH BUY 8.00 10.10 26 2,822 6,557 7,433 8,373 13.4 12.6 12.9 11.4 6.5 14.9 1.9

LPN Development LPN HOLD 4.88 4.70 (4) 210 716 752 805 5.0 7.1 9.6 8.9 5.2 6.3 0.6

Pruksa Holding PSH HOLD 13.10 12.00 (8) 846 2,771 2,913 3,172 5.1 8.9 9.8 9.0 7.7 6.8 0.7

Quality Houses QH HOLD 2.20 2.50 14 696 2,125 2,536 2,718 19.3 7.2 9.3 8.7 6.5 9.4 0.9

Supalai SPALI BUY 20.10 26.00 29 1,156 4,251 5,589 5,951 31.5 6.5 7.0 6.6 6.9 15.3 1.1

Retail Property 7,095 5,621 4,341 8,016 (22.8) 84.7 55.6 30.1 0.6 6.2 3.4

Central Pattana CPN BUY 53.75 60.00 12 7,095 5,621 4,341 8,016 (22.8) 84.7 55.6 30.1 0.6 6.2 3.4

Industrial Estate 1,412 2,524 2,763 3,335 9.5 20.7 17.3 14.3 3.5 9.8 1.7

WHA Corp WHA BUY 3.20 4.40 38 1,412 2,524 2,763 3,335 9.5 20.7 17.3 14.3 3.5 9.8 1.7

Healthcare 19,690 10,603 16,002 18,872 50.9 17.9 58.4 37.4 2.5 12.2 4.8

Bangkok Chain Hosp BCH BUY 21.60 28.50 32 1,590 1,229 3,515 1,743 185.9 (50.4) 15.3 30.9 1.1 42.1 5.5

Bangkok Dusit Med BDMS BUY 22.50 29.00 29 10,557 6,045 6,910 10,094 14.3 46.1 51.7 35.4 3.1 8.1 4.3

Bumrungrad Hospital BH BUY 143.00 155.00 8 3,355 1,199 955 2,360 (20.4) 147.0 119.1 48.2 2.1 5.4 6.7

Chularat Hospital CHG BUY 3.70 4.70 27 1,202 877 1,720 1,264 96.2 (26.5) 23.7 32.2 2.5 37.3 7.8

Praram 9 Hospital PR9 BUY 10.40 14.00 35 241 202 198 359 (2.1) 81.5 41.3 22.8 1.5 4.7 1.9

Ramkhamhaeng Hosp RAM BUY 150.00 225.00 50 1,063 632 1,704 1,750 169.6 2.7 21 20.6 2.8 13.6 2.9

Thonburi Healthcare THG HOLD 32.75 27.50 (16) 816 (31) 288 416 nm 44.7 97 66.8 0.7 3.6 3.5

Vibhavadi Med Center VIBHA BUY 2.16 2.80 30 866 450 712 886 58.2 24.4 45.3 36.4 1.5 8.6 3.5

Tourism 11,293 (26,351) (20,642) 2,547 nm nm (30.9) 238.8 0.0 (14.0) 2.5

Asset World Corp AWC BUY 4.48 5.60 25 4,233 (1,881) (2,449) 293 nm nm (58.5) 489.9 0.0 (3.3) 1.9

Central Plaza Hotel CENTEL BUY 34.25 40.00 17 1,365 (1,550) (2,050) 336 nm nm (22.6) 137.7 0.0 (14.9) 2.6

The Erawan Group ERW BUY 3.08 3.50 14 412 (1,623) (2,004) (207) nm nm (7.0) (67.3) 0.0 (40.8) 2.3

S Hotels & Resorts SHR BUY 3.50 4.20 20 371 (1,908) (1,310) 70 nm nm (9.6) 179.7 0.0 (8.5) 0.8

Minor International MINT BUY 32.00 38.00 19 4,912 (19,388) (12,828) 2,055 nm nm (12.9) 80.7 0.0 (21.2) 3.1

Automotive 473 531 1,958 2,455 268.5 25.4 8.2 6.7 6.4 12.9 1.0

AAPICO Hitech AH BUY 21.20 30.80 45 222 146 994 1,337 581.4 34.5 7.6 5.6 4.6 12.7 0.9

Somboon Adv Tech SAT BUY 20.00 29.00 45 251 385 964 1,117 150.1 15.9 8.8 7.6 8.0 13.0 1.1

Transportation 37,502 2,015 (17,233) 13,220 nm nm (23.9) 190.0 1.1 (7.4) 6.4

Asia Aviation AAV BUY 2.82 3.20 13 404 (4,997) (4,503) (471) nm nm (3.0) (29.1) 0.0 (39.2) 1.6

Don Muang Tollway DMT BUY 12.80 17.00 33 446 791 385 979 (51.3) 154.0 39.2 15.4 5.7 4.5 1.6

Bangkok Airways BA BUY 11.40 16.00 40 693 (4,316) (3,636) 61 nm nm (6.6) 389.9 0.0 (20.5) 1.5

Thai Airways* THAI HOLD n/a 3.40 - - - - -

Airports of Thailand AOT BUY 62.00 80.00 29 26,150 3,236 (15,116) 3,570 nm nm (58.6) 248.1 0.8 (11.8) 7.8

Bangkok Expressway BEM BUY 8.85 8.70 (2) 3,994 2,048 1,844 3,987 (9.9) 116.2 73.3 33.9 0.7 4.8 3.5

Kerry Express (TH) KEX HOLD 38.75 42.00 8 1,991 1,405 1,494 1,787 6.3 19.6 45.1 37.7 0.7 13.1 5.7

Nam Yong Terminal NYT BUY 4.12 5.50 33 151 243 389 419 59.9 7.6 13.1 12.2 6.9 11.9 1.6

BTS Group Holdings BTS BUY 9.45 11.00 16 3,673 3,606 1,909 2,887 (47.1) 51.3 65.1 43.1 2.9 3.3 2.1

ICT 33,931 38,569 37,555 44,966 (2.6) 19.7 5.8 33.2 2.7 23.0 6.2

Advanced Info Serv ADVANC BUY 194.50 200.00 3 17,078 27,186 25,617 27,352 (5.8) 6.8 22.6 21.1 3.4 32.7 7.1

Total Access Comm. DTAC BUY 41.25 40.00 (3) 2,884 5,451 4,002 4,045 (26.6) 1.1 24.4 24.1 2.5 17.2 4.4

True Corporation TRUE HOLD 4.00 3.30 (18) 3,938 (2,961) (1,293) 1,303 nm nm (103.1) 102.4 0.0 (1.6) 1.6

Jasmine Int’l JAS HOLD 2.94 2.70 (8) 746 (3,033) (2,014) (769) nm nm (12.5) (32.8) 0.0 (69.3) 13.3

Intouch Holdings INTUCH HOLD 81.75 65.00 (20) 7,740 11,160 10,124 11,120 (9.3) 9.8 25.9 23.6 3.0 25.8 6.5

Thaicom THCOM REDUCE 10.10 7.10 (30) 327 (135) (41) 37 nm nm (267.1) 300.9 0.0 (0.4) 1.0

Jay Mart JMART BUY 40.00 48.00 20 1,219 900 1,161 1,878 29.0 61.9 36.2 30.1 2.1 24.7 7.4

*THAI TB, HOLD, TP THB3.4; note that the trading of THAI has been suspended since 16 Aug-21 while the company is implementing a rehabilitation plan Sources: Bloomberg; FSSIA estimates




BBG Rec ----Share price --- Up (down) Market ----------- Recur profit ------------- Recur profit

growth --------- P/E ------ DivYld ROE PBV

code Current Target side Cap 2020 21E 22E 21E 22E 21E 22E 21E 21E 21E


SET Index 1,617 1,700 5 546,988 19.4 16.5

Coverage 399,077 457,060 727,325 880,710 59.1 21.1 18.4 15.7 2.8 10.0 1.8

Media 4,450 1,455 1,152 3,474 (20.8) 201.7 252.4 116.2 0.9 4.3 4.0

BEC World BEC BUY 13.70 15.00 9 809 (233) 641 859 nm 34.1 42.8 31.9 0.0 11.2 4.5

Major Cineplex Group MAJOR BUY 21.50 23.00 7 568 (460) (405) 733 nm nm (47.5) 26.2 4.0 (5.4) 2.3

Plan B Media PLANB BUY 6.15 6.30 2 705 140 26 573 (81.1) nm 901.3 41.6 0.0 0.5 4.5

RS RS BUY 17.70 22.00 24 500 528 376 697 (28.8) 85.2 45.8 24.7 0.7 17.6 7.6

VGI VGI HOLD 6.15 5.80 (6) 1,564 1,286 185 194 (85.6) 4.8 286.2 273.1 0.6 4.3 3.2

Workpoint Entertainment WORK BUY 23.30 26.00 12 304 194 329 418 69.6 27.4 31.3 24.6 2.2 4.3 2.2

Construction services 1,638 1,237 1,819 2,733 47.1 50.2 43.2 21.6 1.1 4.6 1.3

CH. Karnchang CK BUY 20.50 23.00 12 1,003 337 583 1,377 73.1 136.1 59.5 25.2 1.0 2.2 1.3

Sino-Thai E&C STEC HOLD 14.10 12.80 (9) 635 900 1,236 1,356 37.3 9.7 17.4 15.9 1.3 8.3 1.4

Building materials 16,044 37,842 63,353 67,087 67.4 5.9 9.4 8.6 4.0 17.0 1.5

Siam Cement SCC BUY 402.00 520.00 29 14,243 34,144 59,925 62,539 75.5 4.4 8.1 7.7 4.1 17.6 1.3

Eastern Polymer Group EPG BUY 11.30 15.50 37 934 1,003 1,219 1,525 21.5 25.1 26.0 20.7 2.1 11.3 2.9

Tipco Asphalt TASCO BUY 18.60 22.50 21 867 2,696 2,209 3,023 (18.0) 36.8 13.2 9.6 4.8 14.8 1.9

Energy & Utilities 112,480 128,418 279,835 320,695 117.9 14.6 22.3 16.8 3.0 13.0 2.6

Oil & Gas 67,836 79,741 210,707 226,620 164.2 7.6 11.9 12.2 3.4 13.0 1.5

PTT PTT BUY 39.25 60.00 53 33,100 51,468 121,052 129,533 135.2 7.0 9.3 8.7 2.5 13.0 1.2

PTT Explor & Prod PTTEP BUY 119.00 158.00 33 13,948 23,685 44,667 46,059 88.6 3.1 10.6 10.3 5.7 12.3 1.3

PTT Oil and Retail Bus OR BUY 28.00 36.00 29 9,920 9,963 9,365 11,515 (6.0) 23.0 35.9 29.2 1.4 13.9 3.5

Bangkok Aviation Fuel Serv BAFS BUY 30.00 40.00 33 565 (464) (107) 1,103 nm nm nm 17.3 0.0 (2.1) 3.9

Thai Oil TOP BUY 52.75 67.00 27 3,177 (3,301) 12,698 11,766 nm (7.3) 8.5 9.1 5.3 10.6 0.9

Star Petroleum Refining SPRC BUY 9.90 11.00 11 1,267 2,068 4,852 5,878 134.6 21.2 8.8 7.3 8.1 17.5 1.5

Bangchak Corp BCP BUY 27.50 38.00 38 1,102 (3,718) 2,634 5,731 nm 117.6 14.4 6.6 3.5 5.6 0.8

PTG Energy PTG BUY 16.40 20.80 27 809 1,857 1,897 2,008 2.1 5.9 14.4 13.6 0.9 22.5 3.0

Esso Thailand ESSO BUY 8.30 14.30 72 848 1,212 4,351 4,549 259.0 4.6 6.6 6.3 1.2 26.3 1.5

Susco SUSCO BUY 3.22 3.50 9 95 218 299 342 37.2 14.6 11.9 10.3 0.0 8.2 0.9

Scan Inter SCN BUY 2.34 3.10 32 83 42 97 132 128.5 36.7 29.1 21.3 1.7 3.7 1.1

Banpu BANPU BUY 12.70 14.60 15 2,922 (3,288) 8,905 8,002 nm (10.1) 7.8 11.4 6.1 12.7 0.9

Utilities 44,644 48,677 69,129 94,075 42.0 36.1 38.0 23.9 2.4 13.0 4.3

Utilities - IPP 31,703 33,418 47,438 67,359 42.0 42.0 44.2 26.2 2.4 10.1 4.2

B.Grimm Power BGRIM BUY 41.25 56.00 36 3,175 2,617 2,882 3,966 10.1 37.6 37.3 27.1 2.4 10.2 3.7

Gulf Energy Development GULF BUY 41.00 47.00 15 14,203 4,478 6,590 12,632 47.2 91.7 73.0 38.1 1.0 10.0 7.1

Global Power Synergy GPSC BUY 76.25 100.00 31 6,348 7,113 8,350 9,918 17.4 18.8 25.8 21.7 2.5 8.0 2.1

Banpu Power BPP BUY 17.50 23.00 31 1,575 3,783 5,413 6,114 43.1 13.0 9.9 8.7 4.6 12.7 1.2

CK Power CKP BUY 5.35 6.60 23 1,284 416 2,267 3,182 444.4 40.3 19.2 13.7 3.7 9.1 1.7

Electricity Generating EGCO BUY 175.00 245.00 40 2,720 8,215 13,061 17,076 59.0 30.7 7.1 5.4 4.1 12.3 0.8

Ratch Group RATCH BUY 45.00 60.00 33 1,926 5,982 7,655 13,150 28.0 71.8 8.5 7.6 7.0 12.2 1.0

WHA Utilities & Power WHAUP HOLD 4.18 4.50 8 472 813 1,220 1,321 50.1 8.3 13.1 12.1 7.2 9.9 1.3





BBG Rec ---Share price ---- Up (down) Market ------------ Recur profit ------------- Recur profit

growth ------ P/E ----- DivYld ROE PBV

code Current Target side Cap 2020 21E 22E 21E 22E 21E 22E 21E 21E 21E


SET Index 1,617 1,700 5 546,988 19.4 16.5

Coverage 399,077 457,060 727,325 880,710 59.1 21.1 18.4 15.7 2.8 10.0 1.8

Utilities - renewable 12,940 15,259 21,690 26,717 42.1 23.2 23.0 18.3 2.2 20.3 4.5

BCPG BCPG BUY 13.70 17.00 24 1,097 1,912 2,580 2,562 34.9 (0.7) 15.2 15.6 5.1 10.8 1.6

Clover Power CV BUY 3.44 5.50 60 130 94 144 174 53.6 20.3 24.8 25.4 1.3 10.7 2.1

Energy Absolute EA BUY 62.25 76.00 22 6,855 5,155 8,192 9,742 58.9 18.9 28.3 23.8 0.4 26.1 6.7

Nex Point NEX BUY 8.45 13.40 59 418 (214) 439 1,473 nm 235.4 32.2 9.6 1.8 13.8 4.2

Gunkul Engineering GUNKUL BUY 4.80 5.40 13 1,259 1,189 2,595 3,102 118.3 19.5 16.4 13.7 3.8 20.2 3.2

Power Solution Tech PSTC BUY 2.44 3.70 52 171 15 111 351 645.2 215.3 52.1 16.5 0.4 1.9 1.0

Demco DEMCO BUY 5.75 5.90 3 124 55 181 213 227.3 17.8 23.2 19.7 1.7 3.8 0.9

Sermsang Power Corp SSP BUY 12.40 20.00 61 371 697 999 1,255 43.3 25.6 13.8 11.0 3.2 18.7 2.1

TPC Power Holding TPCH BUY 10.90 14.00 28 129 251 225 483 (10.2) 114.5 19.4 9.0 4.1 7.5 1.4

Absolute Clean Energy ACE BUY 3.84 4.80 25 1,154 1,358 1,248 2,467 (8.1) 97.6 15.7 7.9 2.1 9.7 1.4

Earth Tech Environment ETC HOLD 2.66 2.10 (21) 176 240 318 329 32.3 3.7 18.8 18.1 2.1 12.6 2.3

TPI Polene Power TPIPP BUY 4.26 5.70 34 1,057 4,506 4,657 4,566 3.4 (1.9) 7.7 7.8 9.4 15.7 1.2

Petrochemical 18,580 (233) 66,665 64,126 nm (3.8) 9.8 10.2 5.6 13.5 1.2

Indorama Ventures IVL BUY 44.00 62.00 41 7,294 6,430 22,909 26,019 256.3 13.6 10.9 9.6 4.7 16.5 1.7

IRPC PCL IRPC BUY 4.18 5.00 20 2,522 (6,152) 10,907 12,323 nm 13.0 7.8 6.9 6.4 14.0 1.1

PTT Global Chemical PTTGC BUY 63.25 75.00 19 8,420 (969) 32,431 25,227 nm (22.2) 8.8 11.3 6.4 11.2 1.0

Global Green Chem GGC BUY 11.40 13.50 18 345 458 418 557 (8.8) 33.3 26.5 19.9 3.5 4.2 1.1

Pharma products 2,663 14,302 29,875 16,028 108.9 (46.3) 3.0 5.6 19.0 68.2 1.6

Sri Trang Gloves (TH) STGT HOLD 31.50 39.00 24 2,663 14,302 29,875 16,028 108.9 (46.3) 3.0 5.6 19.0 68.2 1.6

Packaging 7,795 6,638 10,099 13,027 52.1 29.0 26.1 20.3 1.2 11.0 2.8

SCG Packaging SCGP BUY 61.50 82.00 33 7,795 6,638 10,099 13,027 52.1 29.0 26.1 20.3 1.2 11.0 2.8




Corporate Governance report of Thai listed companies 2020

EXCELLENT LEVEL AAV ADVANC AF AIRA AKP AKR ALT AMA AMATA AMATAV ANAN AOT AP ARIP ARROW ASP BAFS BANPU BAY BCP BCPG BDMS BEC BEM BGRIM BIZ BKI BLA BOL BPP BRR BTS BWG CENTEL CFRESH CHEWA CHO CIMBT CK CKP CM CNT COL COMAN COTTO CPALL CPF CPI CPN CSS DELTA DEMCO DRT DTAC DTC DV8 EA EASTW ECF ECL EGCO EPG ETE FNS FPI FPT FSMART GBX GC GCAP GEL GFPT GGC GPSC GRAMMY GUNKUL HANA HARN HMPRO ICC ICHI III ILINK INTUCH IRPC IVL JKN JSP JWD K KBANK KCE KKP KSL KTB KTC LANNA LH LHFG LIT LPN MAKRO MALEE MBK MBKET MC MCOT METCO MFEC MINT MONO MOONG MSC MTC NCH NCL NEP NKI NOBLE NSI NVD NYT OISHI ORI OTO PAP PCSGH PDJ PG PHOL PLANB PLANET PLAT PORT PPS PR9 PREB PRG PRM PSH PSL PTG PTT PTTEP PTTGC PYLON Q-CON QH QTC RATCH RS S S & J SAAM SABINA SAMART SAMTEL SAT SC SCB SCC SCCC SCG SCN SDC SEAFCO SEAOIL SE-ED SELIC SENA SIRI SIS SITHAI SMK SMPC SNC SONIC SORKON SPALI SPI SPRC SPVI SSSC SST STA SUSCO SUTHA SVI SYMC SYNTEC TACC TASCO TCAP TFMAMA THANA THANI THCOM THG THIP THRE THREL TIP TIPCO TISCO TK TKT TTB TMILL TNDT TNL TOA TOP TPBI TQM TRC TSC TSR TSTE TSTH TTA TTCL TTW TU TVD TVI TVO TWPC U UAC UBIS UV VGI VIH WACOAL WAVE WHA WHAUP WICE WINNER TRUE

VERY GOOD LEVEL 2S ABM ACE ACG ADB AEC AEONTS AGE AH AHC AIT ALLA AMANAH AMARIN APCO APCS APURE AQUA ASAP ASEFA ASIA ASIAN ASIMAR ASK ASN ATP30 AUCT AWC AYUD B BA BAM BBL BFIT BGC BJC BJCHI BROOK BTW CBG CEN CGH CHARAN CHAYO CHG CHOTI CHOW CI CIG CMC COLOR COM7 CPL CRC CRD CSC CSP CWT DCC DCON DDD DOD DOHOME EASON EE ERW ESTAR FE FLOYD FN FORTH FSS FTE FVC GENCO GJS GL GLAND GLOBAL GLOCON GPI GULF GYT HPT HTC ICN IFS ILM IMH INET INSURE IRC IRCP IT ITD ITEL J JAS JCK JCKH JMART JMT KBS KCAR KGI KIAT KOOL KTIS KWC KWM L&E LALIN LDC LHK LOXLEY LPH LRH LST M MACO MAJOR MBAX MEGA META MFC MGT MILL MITSIB MK MODERN MTI MVP NETBAY NEX NINE NTV NWR OCC OGC OSP PATO PB PDG PDI PICO PIMO PJW PL PM PPP PRIN PRINC PSTC PT QLT RCL RICHY RML RPC RWI S11 SALEE SAMCO SANKO SAPPE SAWAD SCI SCP SE SEG SFP SGF SHR SIAM SINGER SKE SKR SKY SMIT SMT SNP SPA SPC SPCG SR SRICHA SSC SSF STANLY STI STPI SUC SUN SYNEX T TAE TAKUNI TBSP TCC TCMC TEAM TEAMG TFG TIGER TITLE TKN TKS TM TMC TMD TMI TMT TNITY TNP TNR TOG TPA TPAC TPCORP TPOLY TPS TRITN TRT TRU TSE TVT TWP UEC UMI UOBKH UP UPF UPOIC UT UTP UWC VL VNT VPO WIIK WP XO YUASA ZEN ZIGA ZMICO

GOOD LEVEL 7UP A ABICO AJ ALL ALUCON AMC APP ARIN AS AU B52 BC BCH BEAUTY BGT BH BIG BKD BLAND BM BR BROCK BSBM BSM BTNC CAZ CCP CGD CITY CMAN CMO CMR CPT CPW CRANE CSR D EKH EP ESSO FMT GIFT GREEN GSC GTB HTECH HUMAN IHL INOX INSET IP JTS JUBILE KASET KCM KKC KUMWEL KUN KWG KYE LEE MATCH MATI M-CHAI MCS MDX MJD MM MORE NC NDR NER NFC NNCL NPK NUSA OCEAN PAF PF PK PLE PMTA POST PPM PRAKIT PRECHA PRIME PROUD PTL RBF RCI RJH ROJNA RP RPH RSP SF SFLEX SGP SISB SKN SLP SMART SOLAR SPG SQ SSP STARK STC SUPER SVOA TC TCCC THMUI TIW TNH TOPP TPCH TPIPP TPLAS TTI TYCN UKEM UMS VCOM VRANDA WIN WORK WPH

Description Score Range

Excellent 90-100

Very Good 80-89

Good 70-79

Disclaimer: The disclosure of the survey results of the Thai Institute of Directors Association (‘IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the Market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey results may be changed after that date. FSS International Investment Advisory Company Limited does not confirm nor certify the accuracy of such survey results. * CGR scoring should be considered with news regarding wrong doing of the company or director or executive of the company such unfair practice on securities trading, fraud, and corruption SEC imposed a civil sanction against insider trading of director and executive; ** delisted Source: Thai Institute of Directors Association (IOD); FSSIA’s compilation



Anti-corruption Progress Indicator 2020 CERTIFIED

2S ADVANC AI AIE AIRA AKP AMA AMANAH AP AQUA ARROW

ASK ASP AYUD B BAFS BANPU BAY BBL BCH BCP BCPG

BGC BGRIM BJCHI BKI BLA BPP BROOK BRR BSBM BTS BWG

CEN CENTEL CFRESH CGH CHEWA CHOTI CHOW CIG CIMBT CM CMC

COL COM7 CPALL CPF CPI CPN CSC DCC DELTA DEMCO DIMET

DRT DTAC DTC EASTW ECL EGCO FE FNS FPI FPT FSS

FTE GBX GC GCAP GEL GFPT GGC GJS GPSC GSTEEL GUNKUL

HANA HARN HMPRO HTC ICC ICHI IFS INET INSURE INTUCH IRPC

ITEL IVL K KASET KBANK KBS KCAR KCE KGI KKP KSL

KTB KTC KWC L&E LANNA LHFG LHK LPN LRH M MAKRO

MALEE MBAX MBK MBKET MC MCOT MFC MFEC MINT MONO MOONG

MPG MSC MTC MTI NBC NEP NINE NKI NMG NNCL NSI

NWR OCC OCEAN OGC ORI PAP PATO PB PCSGH PDG PDI

PDJ PE PG PHOL PL PLANB PLANET PLAT PM PPP PPPM

PPS PREB PRG PRINC PRM PSH PSL PSTC PT PTG PTT

PTTEP PTTGC PYLON Q-CON QH QLT QTC RATCH RML RWI S & J

SABINA SAT SC SCB SCC SCCC SCG SCN SEAOIL SE-ED SELIC

SENA SGP SIRI SITHAI SMIT SMK SMPC SNC SNP SORKON SPACK

SPC SPI SPRC SRICHA SSF SSSC SST STA SUSCO SVI SYNTEC

TAE TAKUNI TASCO TBSP TCAP TCMC TFG TFI TFMAMA THANI THCOM

THIP THRE THREL TIP TIPCO TISCO TKT TTB TMD TMILL TMT

TNITY TNL TNP TNR TOG TOP TPA TPCORP TPP TRU TSC

TSTH TTCL TU TVD TVI TVO TWPC U UBIS UEC UKEM

UOBKH UWC VGI VIH VNT WACOAL WHA WHAUP WICE WIIK XO

ZEN TRUE

DECLARED

7UP ABICO AF ALT AMARIN AMATA AMATAV ANAN APURE B52 BKD

BM BROCK BUI CHO CI COTTO DDD EA EFORL EP ERW

ESTAR ETE EVER FSMART GPI ILINK IRC J JKN JMART JMT

JSP JTS KWG LDC MAJOR META NCL NOBLE NOK PK PLE

ROJNA SAAM SAPPE SCI SE SHANG SINGER SKR SPALI SSP STANLY

SUPER SYNEX THAI TKS TOPP TRITN TTA UPF UV WIN ZIGA

Level

Certified This level indicates practical participation with thoroughly examination in relation to the recommended procedures from the audit committee or the SEC’s certified auditor, being a certified member of Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC) or already passed examination to ensure independence from external parties.

Declared This level indicates determination to participate in the Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC)

Disclaimer: The disclosure of the Anti-Corruption Progress Indicators of a listed company on the Stock Exchange of Thailand, which is assessed by Thaipat Institute, is made in order to comply with the policy and sustainable development plan for the listed companies of th e Office of the Securities and Exchange Commission. Thaipat Institute made this assessment based on the information received from the listed company, as stipulated in the form for the assessment of Anti-corruption which refers to the Annual Registration Statement (Form 56-1), Annual Report (Form 56-2), or other relevant documents or reports of such listed company . The assessment result is therefore made from the perspective of Thaipat Institute that is a third party. It is not an assessment of operation and is not based on any inside information. Since this assessment is only the assessment result as of the date appearing in the assessment result, it may be changed after that date or when there is any change to the relevant information. Nevertheless, FSS International Investment Advisory Company Limited does not confirm, verify, or certify the accuracy and completeness of the assessment results.

Note: Companies participating in Thailand's Private Sector Collective Action Coalition Against Corruption programme (Thai CAC) under Thai Institute of Directors (as of June 24, 2019) are categorised into: 1) companies that have declared their intention to join CAC, and; 2) companies certified by CAC. Source: The Securities and Exchange Commission, Thailand; * FSSIA’s compilation



GENERAL DISCLAIMER

ANALYST(S) CERTIFICATION

Songklod Wongchai FSS International Investment Advisory Securities Co., Ltd

The individual(s) identified above certify(ies) that (i) all views expressed in this report accurately reflect the personal view of the analyst(s) with regard to

any and all of the subject securities, companies or issuers mentioned in this report; and (ii) no part of the compensation of the analyst(s) was, is, or will

be, directly or indirectly, related to the specific recommendations or views expressed herein.

This report has been prepared by FSS International Investment Advisory Company Limited (FSSIA). The information herein has been obtained from

sources believed to be reliable and accurate; however FSS makes no representation as to the accuracy and completeness of such information.

Information and opinions expressed herein are subject to change without notice. FSS has no intention to solicit investors to buy or sell any security in

this report. In addition, FSS does not guarantee returns nor price of the securities described in the report nor accept any liability for any loss or damage

of any kind arising out of the use of such information or opinions in this report. Investors should study this report carefully in making investment

decisions. All rights are reserved.

This report may not be reproduced, distributed or published by any person in any manner for any purpose without permission of FSSIA. Investment in

securities has risks. Investors are advised to consider carefully before making investment decisions.

Company Ticker Price Rating Valuation & Risks

Bangkok Bank BBL TB THB 120.00 BUY Downside risks to our GGM-based TP are 1) prolonged economic sluggishness and further waves of the COVID-19 pandemic affecting loan growth and asset quality; and 2) the impact of further interest rate cuts on NIM and potential new regulations from the Bank of Thailand on debt-servicing programs.

Kasikornbank KBANK TB THB 137.50 BUY Downside risks to our GGM-based TP are 1) prolonged economic sluggishness and further waves of the Covid-19 pandemic affecting loan growth and asset quality; and 2) the impact of further interest rate cuts on NIM and potential new regulations from the Bank of Thailand on debt-servicing programs.

Kiatnakin Bank KKP TB THB 55.50 BUY Downside risks to our GGM-based target price include weakening asset quality and lower fee income.

Krung Thai Bank KTB TB THB 11.20 HOLD Downside risks to our GGM-based TP are 1) prolonged economic sluggishness and further waves of the Covid-19 pandemic affecting loan growth and asset quality; and 2) the impact of further interest rate cuts on NIM and potential new regulations from the Bank of Thailand on debt-servicing programs. The upside risk is the better-than-expected ability to control cost of funds.

Siam Commercial Bank SCB TB THB 124.50 BUY Downside risks to our SOTP-based TP are 1) prolonged economic sluggishness and further waves of the Covid-19 pandemic affecting loan growth and asset quality; and 2) the impact of further interest rate cuts on its NIM.

Tisco Financial TISCO TB THB 92.50 BUY Downside risks to our GGM-based TP are 1) prolonged economic sluggishness and a second wave of the COVID-19 pandemic affecting loan growth and asset quality; 2) the impact of new regulations from the Bank of Thailand on debt-servicing programs; and 3) the slow expansion of its high-yield auto cash portfolio.

TMBThanachart Bank TTB TB THB 1.14 BUY Downside risks to our GGM-based TP are 1) prolonged economic sluggishness and further waves of the Covid-19 pandemic affecting loan growth and asset quality; and 2) the impact of further interest rate cuts on NIM and potential new regulations from the Bank of Thailand on debt-servicing programs.

Aeon Thana Sinsap (Thailand) AEONTS TB THB 183.00 BUY Downside risks to our GGM-derived TP include 1) intense competition that could push marketing expenses higher; 2) regulatory actions to curb industry growth; and 3) deteriorating asset quality.

Krungthai Card KTC TB THB 55.25 HOLD Upside risks to our GGM-derived TP include 1) stronger-than-expected KTBL growth; and 2) a better-than-expected bad debt recovery. Downside risks are 1) regulatory actions to curb industry growth; and 2) deteriorating asset quality.

Muangthai Capital MTC TB THB 58.25 BUY Downside risks to our GGM-based TP include the expansion into auto-title loans by the Government Savings Bank; further weakening asset quality could potentially hit both loan yield and credit cost.

Srisawad Corp SAWAD TB THB 63.25 BUY Downside risks to our GGM-based TP include 1) a further weakening of asset quality that could potentially hit both loan yield and credit cost; and 2) changes in financial regulations by the Bank of Thailand.

Saksiam Leasing SAK TB THB 8.35 BUY Downside risks to our GGM-derived TP include 1) competition from existing and new players; 2) regulatory changes by the BoT; and 3) a slower-than-expected reduction in its cost of funds due to a shift toward more long-term loans.

Ngern Tid Lor TIDLOR TB THB 34.25 BUY Downside risks to our GGM-based TP include 1) the expansion into auto-title loans by the Government Savings Bank; 2) further weakening asset quality could potentially hit both loan yield and credit cost; and 3) tighter supervision from related regulators.

Micro Leasing MICRO TB THB 7.55 BUY Downside risks to our GGM-derived TP include 1) an economic slowdown, especially for logistics activities and private investment; 2) deteriorating asset quality; and 3) a slower-than-expected reduction in the cost of funds due to a shift toward more long-term loans.

Singer Thailand SINGER TB THB 40.75 BUY Downside risks to our GGM-derived TP include 1) an economic slowdown leading to slower loan growth and lower sales of electrical products and home appliances; and 2) deteriorating asset quality.

Ratchthani Leasing THANI TB THB 4.08 BUY Downside risks to our GGM-derived TP include 1) an economic slowdown, especially for logistics activities and private investment; 2) deteriorating asset quality; and 3) changes in financial regulations from the Bank of Thailand.



Bangkok Commercial Asset Mngt.

BAM TB THB 18.50 BUY Downside risks to our GGM-based TP include 1) lower cash collection from its fully amortised portfolio; 2) lower-than-expected bad debt acquisition; and 3) the prolonged slowdown of the property market.

Chayo Group CHAYO TB THB 12.10 BUY Downside risks to our GGM-based TP include 1) lower-than-expected bad debt acquisition; and 2) higher-than-expected operating expenses.

JMT Network Services JMT TB THB 45.25 BUY Downside risks to our GGM-based TP include 1) lower cash collection from its fully amortised portfolio; and 2) the lower-than-expected acquisition of new bad debt.

Thanachart Capital TCAP TB THB 34.25 HOLD Upside risks to our GGM-based target price are M&A completions and long-term synergy gained, leading to a higher contribution to its earnings. Downside risks are impacts from a prolonged weak macro outlook on loan growth and asset quality which could lead to higher provisions for both TMB and THANI.

Next Capital NCAP TB THB 11.00 BUY Downside risks to our GGM-derived TP include 1) an economic slowdown, especially for food delivery and logistics activities; 2) deteriorating asset quality; and 3) tighter competition from new players.

Ditto (THAILAND) DITTO TB THB 17.10 BUY Downside risks to our PEG-based TP include 1) technological changes that will affect competitiveness; and 2) income and gross margin inconsistency due to the nature of the project service business.

Berli Jucker BJC TB THB 33.25 HOLD Key downside risks to our DCF-based TP could come from 1) competition with Tesco Lotus which could impact its sales and gross margin; and 2) a lower-than-expected utilisation rate and profit margin from its packaging unit after losing major customers in Thailand. The key upside risk is from easing competition in the hypermarket segment.

CP All CPALL TB THB 62.75 BUY The key downside risks to our DCF-derived TP are: 1) the higher-than-expected impact from a loss of service income from the convenience store business; 2) the worse-than-expected overseas performance of Makro; and 3) the slow recovery of tourist numbers.

Central Retail Corp CRC TB THB 34.00 BUY The key downside risks to our DCF-based TP include 1) new waves of Covid-19; and 2) lower-than-expected sales from the high-margin fashion business.

Siam Global House GLOBAL TB THB 21.00 BUY The key downside risks to our DCF-based TP are volatile farm incomes and farm prices which could negatively impact purchasing power, especially in the provinces.

Home Product Center HMPRO TB THB 13.60 BUY The key downside risks to our DCF-based TP include: 1) lower-than-expected SSSG; 2) the slow recovery of tourist numbers; and 3) operating losses from its overseas business.

Siam Makro MAKRO TB THB 50.25 HOLD The key downside risks to our DCF-based TP include: 1) lower-than-expected SSSG; 2) lower-than-expected GPM improvement; and 3) operational losses from its overseas business. The key upside risks include: 1) the faster-than-expected recovery of Lotus’ performance; and 2) a more aggressive expansion plan.

Charoen Pokphand Foods CPF TB THB 25.75 BUY The key downside risks to our SoTP-based target price are the volatile pork prices in both Thailand and Vietnam which could hurt revenues and the company’s gross margin.

Asian Sea Corporation ASIAN TB THB 17.70 BUY Downside risks to our P/E based TP would be 1) a stronger-than-expected THB against USD; and 2) the high volatility of raw material prices, such as tuna and squid prices, which could hurt the company’s GPM.

Agripure Holdings APURE TB THB 8.10 BUY Downside risks to our P/E based TP would be 1) order cancellations from big customers like Walmart; 2) a stronger-than-expected THB against USD; and 3) the high volatility of raw material prices, such as the corn price, which could hurt the company’s GPM.

Srinanaporn Marketing SNNP TB THB 10.90 BUY The key downside risks to our DCF-based TP are 1) slower-than-expected demand growth and market penetration overseas, especially in Cambodia and Vietnam; 2) a lower-than-expected profit margin due to high raw material and transportation costs; and 3) higher-than-expected SG&A expenses from overseas operations.

Carabao Group CBG TB THB 123.50 BUY The key downside risks to our DCF-based TP are 1) slower-than-expected sales growth in Myanmar, Cambodia, and the vitamin C drink market; 2) a decrease in domestic energy drink market share; and 3) higher-than-expected SG&A expenses from overseas operations, such as in China and the UK.

Osotspa PCL OSP TB THB 34.50 BUY The key downside risks to our DCF-based TP are 1) a decline in energy drink market share in Myanmar due to strong competition; 2) a slow recovery in the economy; and 3) lower-than-expected SG&A savings from the Fit Fast Firm program.

AP (Thailand) AP TB THB 8.15 BUY Downside risks to our P/E based TP are declining profitability from rising cost pressure in tandem with weakening pricing power and increased competition, such that it hurts take-up rates. This is especially true for condominium projects which typically have more units than low-rise projects.

Land and Houses LH TB THB 8.00 BUY Key risks to our SoTP-based TP are slower responses to new launches and new project postponements. Key risks on the macro front include 1) a slower market expansion than we assume; 2) intensifying competition, which could undermine profitability; and 3) rising cost pressure.

LPN Development LPN TB THB 4.88 HOLD Upside risks to our TP are revivals in new launches and better-than-expected take-up rates of new launches. Downside risks to our call are lower profitability from inventory clearance and delays in new launches.

Pruksa Holding PSH TB THB 13.10 HOLD Key downside risks to our TP are a weaker-than-expected take-up rate for new launches, declining utilisation at factories and softening profitability. Key upside risks are a better-than-expected take up rate for new launches, profitability expansions and faster-than-expected asset turnover.

Quality Houses QH TB THB 2.20 HOLD Key downside risks to our call are delays in new launches, poor demand for new launches, rising competition, residential supply and a lower-than-expected gross profit margin. Key upside risks are a better-than-expected take-up rate of new launches, profitability expansions and faster-than-expected asset turnovers.

Supalai SPALI TB THB 20.10 BUY Downside risks to our P/E derived TP are cost overruns, delays or poor reception of new launches, presale cancellations, homebuyers’ inability to obtain mortgage financing, weak take-up rates and reduced pricing power from rising competition.



Central Pattana CPN TB THB 53.75 BUY Key downside risks to our DCF-derived TP are deviations to our estimates on rental rate, occupancy rate, returns on its new investments, capex and interest rate.

WHA Corp WHA TB THB 3.20 BUY Downside risks to our SoTP-derived TP include 1) lower-than-expected IE land sales and transfers in Thailand and Vietnam; and 2) a lower-than-expected utilization rate from the utilities business in Vietnam.

Bangkok Chain Hospital BCH TB THB 21.60 BUY Downside risks to our DCF-based target price include 1) a slowdown in international patients due to economic concerns, political protests or floods; 2) regulatory risks from drug prices and medical bill controls; and 3) SSO provision expenses following a limited SSO budget.

Bangkok Dusit Medical Services

BDMS TB THB 22.50 BUY Downside risks to our DCF-based target price include 1) a slowdown in international patients due to economic concerns, political protests or floods; 2) regulatory risks from drug price and medical bill controls; and 3) higher-than-expected capex and opex for CoE projects.

Bumrungrad Hospital BH TB THB 143.00 BUY Downside risks to our DCF-based target price include 1) a slowdown in international patients due to economic concerns, political protests or floods; 2) regulatory risks from drug prices and medical bill controls; and 3) higher medical fee discount promotions, leading to a weaker EBITDA margin.

Chularat Hospital CHG TB THB 3.70 BUY Downside risks to our DCF-based target price include 1) a slowdown in Thai patient volume due to economic concerns; 2) regulatory risks from drug price and medical bill controls; and 3) SSO provision expenses following limited budgets from the SSO.

Praram 9 Hospital PR9 TB THB 10.40 BUY Downside risks to our DCF-based target price include 1) weak patient volumes following the economic slowdown; 2) regulatory risks from drug price and medical bill controls; and 3) higher-than-expected expenses from its new building.

Ramkhamhaeng Hospital RAM TB THB 150.00 BUY Downside risks to our DCF-based target price include 1) weak patient volumes following the economic slowdown; 2) regulatory risks from drug price and medical bill controls; and 3) losses from its subsidiary companies.

Thonburi Healthcare Group THG TB THB 32.75 HOLD Downside risks to our DCF-based target price include 1) weak patient volume following the economic slowdown; 2) regulatory risks from drug prices and medical bill controls; and 3) higher-than-expected expenses from new hospitals. Upside risk is big-lot sales of Jin Wellbeing County units.

Vibhavadi Medical Center VIBHA TB THB 2.16 BUY Downside risks to our DCF-based target price include 1) a slowdown in Thai patient volume due to economic concerns; 2) regulatory risks from drug prices and medical bill controls; and 3) SSO provision expenses following limited budgets from the SSO.

Asset World Corp AWC TB THB 4.48 BUY Downside risks to our DCF-based target price include 1) extraordinary events such as political turmoil and natural disasters; 2) a higher hotel room supply, which may result in price competition; and 3) the slower-than-expected recovery of international tourist numbers.

Central Plaza Hotel CENTEL TB THB 34.25 BUY Downside risks to our DCF-based target price include 1) extraordinary events such as political turmoil and natural disasters; 2) a higher hotel room supply and higher competition in the F&B business, which may result in price competition; and 3) the slower-than-expected recovery of international tourist numbers.

The Erawan Group ERW TB THB 3.08 BUY Downside risks to our DCF-based target price include 1) extraordinary events such as political turmoil and natural disasters; 2) a higher hotel room supply, which may result in price competition; and 3) the slower-than-expected recovery of international tourist numbers.

S Hotels and Resorts SHR TB THB 3.50 BUY Downside risks to our DCF-based target price include 1) extraordinary events such as political turmoil and natural disasters; 2) a higher hotel room supply, which may result in price competition; and 3) the slower-than-expected recovery of international tourist numbers.

Minor International MINT TB THB 32.00 BUY Downside risks to our DCF-based target price include 1) extraordinary events such as political turmoil and natural disasters; 2) a higher hotel room supply and higher competition in the F&B business, which may result in price competition; and 3) the slower-than-expected recovery of international tourist numbers.

AAPICO Hitech AH TB THB 21.20 BUY Key downside risks to our P/E-derived TP include lower-than-expected car production volumes and lower car sales in both Thailand and Malaysia. Additional downside risks include a faster-than-expected EV adoption rate in Thailand, and exchange rate risk.

Somboon Advance Technology

SAT TB THB 20.00 BUY The key downside risks to our P/E-based TP are the domestic car manufacturing industry recovering more slowly than expected, a slower-than-expected adoption rate for electric vehicles in Thailand, and worse global demand for pickup trucks.

Asia Aviation AAV TB THB 2.82 BUY Downside risks to our P/BV multiple target price include 1) extraordinary events such as political turmoil and natural disasters; 2) higher-than-expected fuel expenses following an increase in oil prices; and 3) the slower-than-expected recovery of international tourist numbers.

Don Muang Tollway DMT TB THB 12.80 BUY Downside risks to our DCF-based TP include 1) lower-than-expected tollway traffic, and 2) dispute risks.

Bangkok Airways BA TB THB 11.40 BUY Downside risks to our SoTP-based TP include 1) extraordinary events such as political turmoil and natural disasters; 2) higher-than-expected fuel expenses following an increase in oil prices; and 3) the slower-than-expected recovery of international tourist numbers.

Thai Airways THAI TB THB 3.32 HOLD Downside risks to our DCF-based target price include 1) extraordinary events such as political turmoil and natural disasters; 2) higher-than-expected fuel expenses following an increase in oil prices; and 3) the slower-than-expected recovery of international tourist numbers. The upside risk is the availability of a COVID-19 vaccine.

Airports of Thailand AOT TB THB 62.00 BUY Downside risks to our DCF-based target price include 1) a slowdown in the recovery of international passengers; 2) delays in the Suvarnabhumi Airport expansions (satellite terminal and northern expansion); and 3) the termination of the duty-free concession contracts from King Power.



Bangkok Expressway and Metro

BEM TB THB 8.85 BUY The key downside risks to our SoTP-based TP are 1) traffic and ridership recovering more slowly than our expectation; and 2) the company being unable to win the new mass transit project bids.

Kerry Express (Thailand) KEX TB THB 38.75 HOLD The key upside and downside risks to our DCF-based TP are 1) if the competition is higher or lower than our expectation; 2) if Covid-19 continues to spread further; and 3) if M&A deals can boost the company's earnings above or below our expectation.

Nam Yong Terminal NYT TB THB 4.12 BUY The key downside risks to our P/E multiple TP includes 1) weaker-than-expected Thai car exports; and 2) inability to secure an A5 contract extension.

BTS Group Holdings BTS TB THB 9.45 BUY The key downside risks to our SOTP-based TP include a slower-than-expected recovery of the Thai economic outlook and the company not being able to win new mass transit projects.

Advanced Info Service ADVANC TB THB 194.50 BUY The key downside risks to our DCF-based TP are stronger-than-expected competition in the mobile market and the slower-than-expected adoption of 5G use cases.

Total Access Communication DTAC TB THB 41.25 HOLD The key downside and upside risks to our DCF-based TP are if the 5G subscription losses are worse than our expectation, the cost of the 3500MHz band is higher than our expectation, if there is stronger or weaker-than-expected competition in the mobile market, and if there is a faster or slower-than-expected adoption of 5G use cases.

True Corporation TRUE TB THB 4.00 HOLD The key upside and downside risks to our DCF-based TP are if the 5G subscription gains and ARPU are better or worse than our expectation, if the company can reduce its costs better or worse than we expect, and if there is a faster or slower-than-expected adoption of 5G use cases.

Jasmine International JAS TB THB 2.94 HOLD The key upside and downside risks to our SOTP-based TP include better or worse-than-expected growth in FBB and ARPU and better or worse-than-expected cost reduction.

Intouch Holdings INTUCH TB THB 81.75 HOLD The key downside risks to our NAV-discounted TP are if the sluggish performance from the satellite business continues and if there is a slower-than-expected 5G adoption rate. The key upside risk is if INTUCH synergizes with GULF faster than expected.

Thaicom THCOM TB THB 10.10 REDUCE The key upside risks to our P/BV-based TP are 1) if the company is able to secure a new right of use concession for the satellite orbital slots and can generate significant revenue from it; 2) if it can form a partnership with NT or LEO satellite operators; and 3) if its operating costs after the expiration of Thaicom 4 and 6 are lower than expected.

Jay Mart JMART TB THB 40.00 BUY Downside risks to our SOTP-based TP include 1) lower-than-expected mobile revenue; 2) lower cash collection from its fully amortised portfolio; and 3) the lower-than-expected acquisition of new bad debt.

BEC World BEC TB THB 13.70 BUY The key downside risks to our P/E based TP are a lower-than-expected adex recovery and the company’s worse-than-expected cost reduction.

Major Cineplex Group MAJOR TB THB 21.50 BUY The key downside risks to our DCF-based TP are a slower-than-expected recovery in domestic consumption, the growing popularity of online movies, and a delay in the Covid-19 vaccine rollout.

Plan B Media PLANB TB THB 6.15 BUY The key downside risks to our P/E multiple based TP are a slower-than-expected adex recovery and further waves of Covid-19.

RS RS TB THB 17.70 BUY The key downside risk to our SoTP-based TP is if the company is unable to maintain the growth momentum from its commerce business if revenues from TV, radio, and music continue to decline.

VGI Pcl. VGI TB THB 6.15 HOLD The key upside and downside risks to our SoTP-based TP are if the advertising expenditure recovery is slower or faster than our expectation, and whether Rabbit Line Pay is successful or not.

Workpoint Entertainment WORK TB THB 23.30 BUY The key downside risks to our P/E-based TP are weaker-than-expected TV adex, digital advertising becoming more popular, and competitiveness in TV ratings.

CH. Karnchang CK TB THB 20.50 BUY Key downside risks to our SoTP-based TP are delays in new bids, political instability, fluctuations in construction material prices, cost overruns, and the prolonged Covid-19 pandemic.

Sino-Thai E&C STEC TB THB 14.10 HOLD Downside risks to our P/BV multiple valuation-based TP are 1) prolonged political uncertainty; and 2) delays in projects and the construction margin contracting more than expected. The upside risk is if STEC can win the Orange Line bid.

Siam Cement SCC TB THB 402.00 BUY Downside risks to our SOTP based TP include 1) a lower-than-expected demand for chemicals, CBM, and packaging; 2) rising coal costs for its cement and packaging units; and 3) weaker demand from the automobile industry that could erode the demand for SCC’s chemical unit and its dividend contributions.

Eastern Polymer Group EPG TB THB 11.30 BUY Downside risks to our EV/EBITDA-based target price include 1) a sharp rise in feedstock prices, driven mostly by a higher oil price; and 2) lower-than-expected demand

Tipco Asphalt TASCO TB THB 18.60 BUY Downside risks to our EV/EBITDA multiple based TP include 1) a lower asphalt margin due to a oversupply in Asia on the back of faster recovery of utilisation rate for global refiners; and 2) a lower-than-expected supply of alternative crudes and asphalt.

PTT PCL PTT TB THB 39.25 BUY Risks to our SoTP-based valuation are the oil price and potential earnings downside from government intervention.

PTT Explor & Prod PTTEP TB THB 119.00 BUY Risks our TP, which is based on EV/EBITDA, are a sharp decline in oil price and a potential earnings downside from government intervention.

PTT Oil and Retail Business OR TB THB 28.00 BUY The downside risks to our SOTP-based TP include: 1) lower-than-expected demand for petroleum products; 2) a lower marketing margin; and 3) weaker-than-expected jet demand.

Bangkok Aviation Fuel Services

BAFS TB THB 30.00 BUY Downside risks to our SoTP-based target price include a slower than expected vaccination rate, leading to slower demand in tourism activities, plus uncertainty in the fuel volume demand in the north which could lead to volatility in Fuel Pipeline Transportation Limited (FPT)’s income.



Thai Oil TOP TB THB 52.75 BUY Downside risks to our EV/EBITDA-based TP are a sharp rise in oil price and weak demand for refined oil products.

Star Petroleum Refining SPRC TB THB 9.90 BUY TP is based on EV/EBITDA. Downside risks are a sharp rise in oil price and weak demand for refined oil products.

Bangchak Corp BCP TB THB 27.50 BUY The downside risks to our SoTP-based TP include: 1) lower-than-expected demand for petroleum products; 2) higher crude premiums; and 3) unplanned shutdowns of the company?s refinery plants.

PTG Energy PTG TB THB 16.40 BUY The downside risks to our SoTP-based TP include 1) a government cap on oil prices; and 2) weaker demand for diesel and gasoline.

Esso Thailand ESSO TB THB 8.30 BUY The downside risks to our SoTP-based TP on ESSO include 1) lower-than-expected demand for petroleum products, 2) a higher crude premium, and 3) unplanned shutdowns of its refinery and petrochemical plants.

Susco SUSCO TB THB 3.22 BUY The downside risks to our SOTP-based TP include: 1) lower-than-expected demand for petroleum products; 2) a lower marketing margin; and 3) weaker-than-expected jet fuel demand.

Scan Inter SCN TB THB 2.34 BUY The downside risks to our SOTP-based TP include 1) a sharp decline in oil prices; and 2) weaker demand for NGV and delays in new NGV projects.

Banpu BANPU TB THB 12.70 BUY We see downside risks to our SoTP-based TP from lower coal prices, higher diesel costs and any unplanned shutdowns of its power plants. We see upside risks from higher coal prices, higher gas prices and lower costs.

B.Grimm Power BGRIM TB THB 41.25 BUY The downside risks to our SoTP-based TP include 1) lower-than-expected demand for electricity in Thailand, 2) a lower crude price, and 3) unplanned shutdowns of its SPPs.

Gulf Energy Development GULF TB THB 41.00 BUY The downside risks to our SoTP-based TP on GULF include 1) lower-than-expected demand for electricity in Thailand; 2) a lower crude price; and 3) delays in project commercial operation dates.

Global Power Synergy GPSC TB THB 76.25 BUY The downside risks to our SoTP-based TP on GPSC include 1) lower-than-expected demand for electricity in Thailand; 2) a lower crude price; and 3) lower-than-expected demand from industrial users.

Banpu Power BPP TB THB 17.50 BUY Downside risks to our SOTP valuation are the start-up delays of its new projects and government intervention in the electricity tariff.

CK Power CKP TB THB 5.35 BUY The downside risks to our SoTP-based TP include lower-than-expected demand for electricity in Thailand and lower-than-expected water supply for hydro projects.

Electricity Generating EGCO TB THB 175.00 BUY Downside risks to our SoTP-based TP include 1) lower-than expected demand for electricity in Thailand; 2) delays in project commencement or commercial operation dates (COD); and 3) government intervention in electricity tariff subsidies.

Ratch Group RATCH TB THB 45.00 BUY The downside risks to our SoTP-based TP include 1) lower-than-expected demand for electricity in Thailand; 2) lower crude price; and 3) delays in starting new projects.

WHA Utilities & Power WHAUP TB THB 4.18 HOLD Downside risks to our SoTP-based TP include 1) lower-than-expected demand for electricity in Thailand; and 2) lower crude prices. Upside risks are the higher than expected sales volumes of water and electricity for industrial users.

BCPG BCPG TB THB 13.70 BUY The downside risks to our SoTP-based TP include: 1) lower-than-expected demand for electricity in Thailand, the Philippines and Indonesia; and 2) government intervention by way of electricity tariff subsidies.

Clover Power CV TB THB 3.44 BUY The downside risks to our SoTP-based TP include 1) lower-than-expected demand for electricity in Thailand, 2) a lower crude price, and 3) higher costs of biomass feedstock.

Energy Absolute EA TB THB 62.25 BUY Downside risks to our SoTP-based TP include: 1) lower-than-expected demand for electricity in Thailand; 2) lower crude prices; and 3) lower-than-expected demand for batteries.

Nex Point NEX TB THB 8.45 BUY Downside risks to our SOTP-based TP include: 1) a lower-than-expected bus sales volume; 2) delays in bus deliveries; and 3) risk from regulatory changes.

Gunkul Engineering GUNKUL TB THB 4.80 BUY The downside risks to our SoTP-based TP on GUNKUL include 1) lower-than-expected demand for electricity in Thailand, 2) declining EPC backlogs, and 3) lower-than-expected utilisation rates for solar and wind farms.

Power Solution Technologies PSTC TB THB 2.44 BUY The downside risks to our SoTP-based TP on PSTC include 1) lower-than-expected demand for electricity in Thailand and delays of power plant project start-ups.

Demco DEMCO TB THB 5.75 BUY Downside risk includes delays in bidding for power transmission projects.

Sermsang Power Corp SSP TB THB 12.40 BUY The downside risks to our SoTP-based TP for SSP include 1) a lower-than-expected demand for electricity in Thailand; 2) a lower crude price; and 3) project start-up delays.

TPC Power Holding TPCH TB THB 10.90 BUY The downside risks to our SoTP-based TP include 1) lower-than-expected demand for electricity in Thailand, 2) a lower crude price, and 3) higher costs of biomass feedstock.

Absolute Clean Energy ACE TB THB 3.84 BUY The downside risks to our SoTP-based TP include 1) lower-than-expected demand for electricity in Thailand, 2) a lower crude price, and 3) higher costs of biomass feedstock.

Earth Tech Environment ETC TB THB 2.66 HOLD Downside risks to our SoTP-based TP include: 1) lower-than-expected demand for electricity in Thailand; 2) lower crude price; and 3) lower-than-expected industrial waste volumes. Upside risks are the faster and larger-than-expected new capacity won by ETC in 2021.

TPI Polene Power TPIPP TB THB 4.26 BUY Downside risks to our SoTP-based TP include 1) lower-than-expected demand for electricity in Thailand; 2) lower crude price, and 3) unplanned shutdown of the company’s power plants.

Indorama Ventures IVL TB THB 44.00 BUY The key downside risks to our EV/EBITDA-based TP are weaker-than-expected margins for PX-PTA and PET-PTA, lower demand for polyester, and delays in IVL's projects.



IRPC PCL IRPC TB THB 4.18 BUY Key risks to our positive view and EV/EBITDA-based target price are weaker-than-expected oil product demand growth and lower-than-expected PP-naphtha and SM-benzene margins.

PTT Global Chemical PTTGC TB THB 63.25 BUY The key downside risks to our EV/EBITDA-based TP are the weaker-than-expected HDPE price and HDPE-naphtha margin.

Global Green Chemicals GGC TB THB 11.40 BUY Downside risks to our EV/EBITDA-based target price include: 1) a sharp decline in crude palm oil price; 2) a change in government policy for biodiesel from the current B7; and 3) a narrower fatty alcohol margin due to the new supply in the US.

Sri Trang Gloves (Thailand) STGT TB THB 31.50 HOLD The downside risks to our P/E-based TP for STGT include 1) a lower-than-expected demand for rubber gloves; 2) higher prices of concentrated natural and synthetic latex and crude; and 3) exchange rate volatility. The upside risk to our call include 1) higher average selling price for rubber gloves and 2) lower prices of concentrated natural and synthetic latex and crude

SCG Packaging SCGP TB THB 61.50 BUY Downside risks to our EV/EBITDA-based TP include a lower-than-expected demand for packaging, rising raw material costs of recycled paper and higher energy costs.


Additional Disclosures

Target price history, stock price charts, valuation and risk details, and equity rating histories applicable to each company rated in this report is available

in our most recently published reports. You can contact the analyst named on the front of this note or your representative at Finansia Syrus Securities

Public Company Limited

FSSIA may incorporate the recommendations and target prices of companies currently covered by FSS Research into equity research reports, denoted

by an ‘FSS’ before the recommendation. FSS Research is part of Finansia Syrus Securities Public Company Limited, which is the parent company of

FSSIA.

All share prices are as at market close on 29-Sep-2021 unless otherwise stated.

RECOMMENDATION STRUCTURE

Stock ratings

Stock ratings are based on absolute upside or downside, which we define as (target price* - current price) / current price.

BUY (B). The upside is 10% or more.

HOLD (H). The upside or downside is less than 10%.

REDUCE (R). The downside is 10% or more.

Unless otherwise specified, these recommendations are set with a 12-month horizon. Thus, it is possible that future price volatility may cause a

temporary mismatch between upside/downside for a stock based on market price and the formal recommendation.

* In most cases, the target price will equal the analyst's assessment of the current fair value of the stock. However, if the analyst doesn't think the market

will reassess the stock over the specified time horizon due to a lack of events or catalysts, then the target price may differ from fair value. In most cases,

therefore, our recommendation is an assessment of the mismatch between current market price and our assessment of current fair value.

Industry Recommendations

Overweight. The analyst expects the fundamental conditions of the sector to be positive over the next 12 months.

Neutral. The analyst expects the fundamental conditions of the sector to be maintained over the next 12 months.

Underweight. The analyst expects the fundamental conditions of the sector to be negative over the next 12 months.

Country (Strategy) Recommendations

Overweight (O). Over the next 12 months, the analyst expects the market to score positively on two or more of the criteria used to determine market

recommendations: index returns relative to the regional benchmark, index sharpe ratio relative to the regional benchmark and index returns relative to

the market cost of equity.

Neutral (N). Over the next 12 months, the analyst expects the market to score positively on one of the criteria used to determine market



Underweight (U). Over the next 12 months, the analyst does not expect the market to score positively on any of the criteria used to determine market



20210930 Thailand Market Strategy - Tri-transition ...

Documents